The worsening state of Britain's balance sheet means the country should be stripped of its 'great' title, as the British public are "sleepwalking" into major spending cuts, Andy Brough, fund manager at Schroders, told CNBC.
"The country is going to be renamed. It's not going to be known as Great Britain, it's just going to be known as Britain," Brough said.
The British public are "sleepwalking" into major spending cuts and there "will be a very rude wake-up call for the majority of people who have no idea how bad the finances are for the country," Brough said.
The high living standards that people in the UK have become used to will all change and services such as health care and rubbish collection could be outsourced, according to Brough.
"We're going to have to pay for virtually everything," he said.
Even though the UK's public finances are in a bad state, the country's AAA rating will not be downgraded, according to Brough. But the cost-cutting could bring major social unrest and an increase in strike action.
Balancing the Books
When looking at the UK's profit and loss figures, Brough said it was hard to see where revenue could really be revved up and major cuts were almost inevitable. The UK has to find 174 billion pounds to balance the books and things have to change, according to Brough.
"Next year, more money will be going out for social protection than is coming in from income tax and national insurance. And you thought Madoff had a great Ponzi scheme," he said.
The UK currently spends 189 billion pounds on social protection, which is the biggest cost for the country and includes things such as health care. Meanwhile, income from items such as corporate tax could be severely hit, he said.
The UK government has not cut spending for 32 years, Brough pointed out.
"Thank god our balance sheet is ok," he added.