UK finances are in a ‘very precarious’ position, report says

UK finance is going through a periodVery dangerous“There is a risk that long-term public debt will rise due to persistent shocks and rising spending, the public budget forecasting body OBR warned in a report on Thursday.”In just three years, (public finances) were hit by the Covid-19 pandemic in early 2020, the energy and cost-of-living crisis from mid-2021 and a sudden hike in interest rates in 2022.», summarizes the OBR.

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Public borrowing has increased

During this period public debt rose as a result of inflation and rising interest rates as a result of a series of bailouts to support the British. Public sector debt in the UK exceeded 100% of gross domestic product (GDP) in May for the first time since 1961. The OBR warns that authorities are ‘British’ without expecting a fall in public spending in the long term.Faced with rising costs due to an aging population, a warming planet and growing geopolitical tensions“.

Under the public system’s baseline scenario, the debt ratio will decline to 88% of GDP in the mid-2030s, but rise to 310% of GDP in 50 years. While the government is calling for public spending to be reined in to avoid fueling British inflation, inflation, already the highest among the G7, was 8.7% in a year in May and is struggling to ease.The plans to stabilize and then reduce the British government’s debt (…) are relatively modest from a historical and international perspective.», OBR notes.

The OBR also notes that the rise in the number of people out of work due to long-term illness poses a significant risk to the UK public finances, and has already added £6.8 billion (almost £8 billion) in spending. Public assistance. The number of people inactive due to long-term illnesses has risen sharply in the UK following the pandemic. Registration waiting lists in the public health system continue to isolate the NHS, which has been underfunded for years.

In its report, the OBR points to a deterioration in Britain’s health that began before the pandemic, including the effects of Covid-19, its effects on mental health or delays in treating others.