OBR WARNS OF GROWING FISCAL RISKS – The OBR says that Britain’s public finances are on an unsustainable path
The Office for Budget Responsibility has warned that Britain’s public finances are on an unsustainable path, with government debt projected to climb to more than 270% of GDP by the early 2070s if current policies remain unchanged.
In its latest Fiscal Risks and Sustainability Report, the OBR said public sector net debt currently stands at around 96% of GDP, close to its highest level since the 1960s. The watchdog estimates that spending pressures from an ageing population, healthcare, pensions and social care could add around 8% of GDP to annual public spending over the next 50 years.
The report also highlighted the growing burden of debt interest payments, which cost taxpayers more than £100 billion a year during recent periods of high inflation and rising interest rates. The OBR warned that Britain has become more vulnerable to economic shocks after a series of crises, including the pandemic, energy price surge and higher borrowing costs.
Without policy changes, the watchdog said persistent budget deficits and rising spending commitments could push debt to unprecedented levels, requiring difficult decisions on taxation, public spending and economic reform to restore long-term fiscal sustainability.
