Britain’s Financial watchdog is warning that Britain’s economy is on an unsustainable footing as an ageing population puts ever more pressure on the public spending. Much of it is driven by the triple lock
They warn that Andy Burnham faces a £100 billion challenge if he wants to put Britain’s public finances on a sustainable path
“In nearly all of the scenarios we explore, debt eventually moves onto an unsustainable and ever-rising path,” it said in the report.
We stress that it is not plausible that the UK, or any other country, could remain on any of the unsustainable paths set out in these scenarios, because they imply that debt will ultimately grow explosively.”
Health spending is projected to rise from 8% of GDP in 2030/31 to 13% of GDP by 2075-76
State pension spending is projected to rise from 5% of GDP to around 9% of GDP by 2075-76
Education spending is expected to fall from 4.3% of GDP to 3.4% of GDP because there are fewer children
Theit baseline scenario forecasts that spending will rise from 40% of GDP to 49% of GDP
The OBR stressed that its scenarios should not be seen as forecasts because it was “almost certain” that future governments would have to take action to prevent them from happening.
But it concluded that “unsustainable fiscal outcomes that may not occur for some years are today’s challenge not tomorrow’s”.
“The degree of tightening required to prevent debt from following an unsustainable path increases if it is delayed to future years,” the report warned.
“This would make it more costly and place more of a burden on future generations.”
