The public finances of the United Kingdom are in a “relatively vulnerable position”, warned the government’s official forecastist.
The Office for Budget Responsibility (OBR) cited a drag of successive economic shocks, recent verifications for reductions in spending and higher political commitments than expected.
He seemed to be alarmed on the path provided for the debt accordingly, in his annual report on tax risks and his durability report.
It experienced total debt greater than 270% of gross domestic product (GDP) in the early 2070s – against a current level of 96.5% – declaring that the increase in debts led to “substantial erosion of the United Kingdom’s capacity to respond to future shocks”.
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The OBR report highlighted the damage to the cocovated pandemic and the cost of living crisis which followed the invasion of Ukraine by Russia.
But that has raised fears that past and current government policies add more to the sustainability of public finances.
The report indicates that triple pension locking, for example, would now cost 15.5 billion pounds sterling per year by 2029-30.
It was “about three times higher than initial expectations,” he said.
The lock, which increases each year in accordance with inflation, wage growth or 2.5% – the highest – increased by more than 2.5% of the database of eight of the 13 years of operation to date, depending on the report.
The guard dog said that he reflected more volatile inflation than expected.
He also resumed the last covers of the government on the well-being planned and the payment reductions for winter fuel in the face of rebellions by labor deputies.
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Decisions should leave the chancellor Rachel Reeves Facing a black hole of 6.75 billion pounds sterling, while lower economic growth than expected could add an additional 9 billion pounds to this sum from the perspective of the fall budget, according to the projections of Sky News which see a vacuum of around 20 billion pounds sterling.
The OBR has highlighted the future risks of the increase in defense spending and the impact of climate change.
Public sector payment requests could also prove to be a brake, with Resident doctors Vote in favor of strikes on salary.
While the ministers recognize damage to the public scholarship for U U, Ms. Reeves has repeatedly excluded a new wave of loans to finance a wave of spending.
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Could the rich be taxed to fill the black hole?
As such, the government has not excluded the prospect of a form of wealth tax to help respect its commitments despite 1% of the highest income already contributing to a third party income tax – in addition to other targeted taxes such as capital gains.
The report indicates: “The efforts to put public finances of the United Kingdom on a more sustainable basis only met with limited and temporary success in recent years in the aftermath of the shocks, the debt also continued to increase and the loan has remained high because governments have reversed the plans to consolidate public finances.
“Planned tax increases have been reversed and, more importantly, reductions in expected expenditure has been abandoned.”
The Chancellor of the Shadow Mel Stride said about the report: “The OBR report is naked for damage: Great Britain now has the third highest deficit and the fourth burden of the highest debt in Europe, with borrowing costs among the highest in the developed world.
“Under the economic mismanagement of Rachel Reeves and the weakness of Keir Starmer’s leadership, our public finances have become dangerously exposed – vulnerable to future shocks, social expenditure increasing despite taxes, taxes increasing at record levels and debt levels.
“The carelessness of work risks everything – your pension, your work, your home, your savings.”
A spokesperson for the number 10 said: “We recognize the realities set out in the OBR report and we make the necessary decisions to ensure stability in public finances.”