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The UK faces “frightening” risks for public finances, as its increased debt burden leads to “significant erosion” of its capacity to respond to future shocks, the independent budget guard warned.
The Budget Responsibility Office announced on Tuesday in its fiscal risks and a sustainability report that efforts to set UK On a more sustainable fiscal basis, they only met with “limited and temporary” success in recent years.
The basic public debt is at the highest level since the early 1960s and needs to rise further, and resolving the issue has become “significantly more problematic” given the low economic growth and rising interest rates, Obr.
“Despite this harder domestic and global background, the scale and the series of risks for the fiscal perspectives of the UK remain frightening,” the report said. “The result was a significant erosion for Britain’s capacity to respond to future shocks and growing pressures on public finances.”
The report comes after Chancellor Rachel Reeves faces renewed pressure to raise taxes in the autumn budget given the signs of further deterioration in public health health.
The involvement of reforms in well -being in combination with strains of the UK economy and the threat of falling productivity from the OB may forcing tax rise or reducing costs exceeding £ 20 billion in the fall, economists say.
In his report, the OBR said that the UK now has the sixth highest debt, the fifth highest deficit and the third highest borrowing costs of 36 advanced economies.
The report also noted additional pressures from the sustainability of state and private pensions, as well as the cost of climate damage and net zero transition.
Increasing public borrowing in the UK and other advanced economies is creating broader pressures in global sovereign debt markets, OBC added.
He noted that borrowing costs have increased further because long -term plating yields are now higher in the UK than at any time since the turn of the century.
Responding to the report, the Ministry of Finance said: “We recognize the long -standing economic realities established by the OB.
“This is why we are committed to providing stability in the economy through our non-negotiating fiscal rules, which have allowed us to invest in the UK to drive a decade of recovery and put more money in people’s pockets,” the report added.
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