Tax rises or spending cuts are needed to avoid an 'unsustainable' public debt burden, the UK's fiscal watchdog has warned.
Tax rises or spending cuts are needed to avoid an"unsustainable" public debt burden, the UK's fiscal watchdog has warned.
The Office for Budget Responsibility said the government faces a debt burden at three times more than its current level due to increasing costs from an ageing population and falling tax revenues from motor fuel in the future. Debt is on course to reach almost 320% of GDP in 50 years' time - up from 96% currently - if successive governments do not tighten fiscal policy, the government agency said.
"Bringing debt back to 75% of GDP - the level at which it stabilised in the government's pre-pandemic March 2020 Budget - would need taxes to rise, spending to fall, or a combination of both, amounting to a 1.5% of GDP additional tightening at the beginning of each decade over the next 50 years," the OBR said.
The UK government has so far spent as much this year to help households with the cost of living crisis - 1.25% of GDP - as it did supporting the economy during the financial crisis.Public debt is now more than double the amount the OBR had expected it to be 20 years ago.
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