Andrew Neil warns that a combination of soaring debt, rising interest rates and an AI investment boom is creating serious risks for the global financial system, echoing concerns raised by Bank of England Governor Andrew Bailey. In his role as chairman of the Financial Stability Board, Bailey told G20 finance ministers meeting in North Carolina that the global financial system is increasingly vulnerable to shocks, a warning that has revived fears of a correction in stock markets that have been driven higher by heavy borrowing. Neil argues the underlying problem is that governments worldwide, especially the United States, have become addicted to debt, with borrowing showing no signs of slowing under the Trump administration.

The article cites the US national debt surpassing $40 trillion this summer, with the Trump administration projected to add nearly $2 trillion annually to deficits, pushing long-term US Treasury borrowing costs above 5.2 per cent and average mortgage rates to around 6.7 per cent. It notes that America's AI hyperscalers are also adding pressure on credit markets by investing several trillion dollars in the technology. The UK faces a similar trajectory, with national debt set to exceed £3 trillion, borrowing costs among the highest in the G7 and G20, and 30-year gilt yields near 5.78 per cent, their highest in almost three decades — driving up mortgage and loan rates despite a lower Bank of England base rate.