During the era of colonial expansion, Britain was once known as the "Empire on which the sun never sets," but those days are long gone.

On August 23rd local time, multiple prominent economists issued warnings that UK Chancellor Reeves' tax and spending policies are pushing Britain toward a debt crisis similar to that of the 1970s, potentially forcing the country to seek bailout assistance from the International Monetary Fund (IMF).

These economists believe that Reeves' approach to economic management could lead Britain to repeat the high inflation and high borrowing era, ultimately forcing the country to borrow from the IMF again, just as it did 50 years ago during the 1976 sterling crisis. Meanwhile, major players in Britain's retail sector are also warning that escalating taxes and cumbersome administrative procedures are pushing the UK into a "stagflation" era, with food price inflation potentially remaining around 5% next year.

Reform UK leader Farage stated on the evening of August 23rd that the current economic situation "feels like a replay of the 1970s." Conservative Party leader Badenoch accused the surging government borrowing costs of being "the result of Labour's poor economic management."

Reports indicate that Reeves faces enormous pressure ahead of the autumn budget. According to forecasts, runaway borrowing has already created a £50 billion fiscal deficit. Despite warnings that further tax increases would only suppress Britain's already weak economic growth, it is widely expected that Reeves will raise taxes again in the budget to cover this deficit.

Former Director of the National Institute of Economic and Social Research (NIESR) Jagjit Chadha pointed out that the current economic situation "could lead to collapse." He believes the current fiscal condition is "as dangerous as it was in 1976 when Britain was forced to seek IMF assistance."

Chadha stated in an interview: "I believe the possibility of an IMF bailout exists. If that happens, we will be in trouble. We won't be able to repay our debts or pay pensions, and welfare payments will become very difficult."

Former Bank of England Monetary Policy Committee member Andrew Sentance also indicated that the current situation is "very much like the 1970s." He noted that Reeves' fiscal policies could bring about a "Healey crisis" similar to 1976 in 2025 or 2026.

Historically, another darkest moment for the British economy was the 1976 sterling crisis, when Denis Healey was Chancellor. Under pressure from surging debt and pound devaluation, Healey applied to the IMF for assistance. In exchange, the IMF demanded significant cuts to public spending, forcing Labour to slash municipal housing construction programs. Today, markets are concerned about Britain's economic prospects, and international investors have already raised interest rates on British borrowing.

"Like Healey back then, Reeves has significantly increased public spending, borrowing, and taxation, driving both demand-pull and cost-push inflation," Sentance stated. "If policies don't change, Britain will face economic collapse."

The scale of national debt is also raising increasing concerns. According to data from the Office for Budget Responsibility (OBR), Britain's debt-to-GDP ratio has reached 96.3%, the fifth highest among developed countries. This means that debt interest payments this year will reach £111.2 billion, equivalent to £1 in debt interest for every £12 the government spends.

Forecasts show that Britain's public finance gap will reach £50 billion. With government borrowing costs soaring, 30-year bond yields have climbed above 5.5%, higher than levels in the United States and Greece, and exceeding levels during the chaotic period when former Prime Minister Truss introduced her "mini-budget."

Additionally, Britain has committed to increasing military spending to 2.5% of GDP by 2027, aligning with NATO commitments. Britain remains "one of Ukraine's most enthusiastic supporters," providing billions of dollars in military and financial aid, further straining the country's already tight public finances.

Opposition figures warn that if Reeves chooses to fill the fiscal deficit through tax increases, it will only further worsen the current situation. They insist that Reeves should cut spending rather than raise taxes.

Reform UK leader Farage stated that if Reeves raises taxes again in the next budget, Britain will fall into an "economic vicious cycle." He wrote: "I have a sense of déjà vu – the 1970s seem to be returning, except now our social conditions are worse than they were then." He further noted: "We are in a debt spiral, and I expect Reeves' budget will make this situation worse. In fact, we are not far from falling into an economic vicious cycle."

Conservative Party leader Badenoch also wrote: "We have experienced similar situations before – the IMF bailout of the 1970s, the 2008 financial crisis. At both critical moments, the task of restoring confidence and stabilizing the economy fell to the Conservative Party. In the future, the Conservative Party will continue to shoulder this responsibility."

In response to external warnings and criticism, a Treasury spokesperson said that talk of Britain's economy facing a 1970s-style debt crisis is "unfounded."

The spokesperson stated: "This government is taking necessary measures to stabilize Britain's fiscal situation and drive economic growth, with fiscal policies supported by the IMF. Our 'change plan' will put more money in working people's pockets, and our commitment to sound fiscal rules has already helped the government reduce interest rates five times since the election. We are also reducing government borrowing so we can invest in better schools, hospitals, and services for working families."