Report says UK’s finances are in ‘very risky’ condition

Public sector debt exceeded 100% of the country’s GDP in May. Toby Melville/Reuters

UK finances going through a phasevery risky“The long-term public debt is at risk of rising due to a series of shocks and rising costs,” public budget forecasting body OBR warned in a report on Thursday. ,In just three years, (public finances) suffered from 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.

public borrowing has increased

As a result of frequent aid schemes to support the British during this period, public borrowing increased, leading to inflation and interest rates. UK public sector debt exceeded 100% of gross domestic product (GDP) in May for the first time since 1961. Far from expecting a decline in public spending in the long term, the OBR warns that the authorities are British.Rising populations, a warming planet and rising geopolitical tensions are facing rising costs,

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According to the public body’s base scenario, the debt ratio will fall to 88% of GDP in the mid-2030s, but then to 310% of GDP in 50 years. While the government calls for restraint in public spending so as not to fuel British inflation, which is already the highest in the G7, at 8.7% a year in May and which is struggling to come down,”The British government’s plans to stabilize and then reduce the debt (…) are relatively modest from a historical and international perspective», notes OBR.

The OBR further notes that since the pandemic the increase in the number of people out of work due to long-term illness poses a significant risk to UK public finances, and has already cost £6.8 billion (approximately 8 billion Euro) has added up to the expenditure. public assistance. The number of people who are inactive due to long-term illnesses in the UK has risen sharply in the wake of the pandemic. Record waiting lists in the public health system, the NHS, which has been underfunded for years, are routinely set aside.

In its report, the OBR pointed to deterioration in the health of Britons that began even before the pandemic, including its effects on mental health or the consequences of Covid-19, including delayed treatment of other pathologies.

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