UK public debt could treble by 2075 - Government

LONDON - UK state debt could almost treble over the next 50 years owing to an ageing population and climate change, a government watchdog forecast on Thursday.

The projection from the Office for Budget Responsibility comes ahead of the Labour government's maiden budget next month in which some taxes are expected to rise to help fill a blackhole estimated at £22 billion ($29 billion).

Commenting on its latest annual Fiscal Risks and Sustainability report, the OBR noted that "long-term projections such as these are clearly highly uncertain".

But it added that "pressures such as demographic change, rising healthcare costs, and climate change, push debt onto a permanent upward trajectory".

The OBR forecast UK public debt to almost treble to more than 270 per cent of the country's gross domestic product by 2075 from a record 100 per cent GDP currently.

"The estimated damage to the economy and public finances from a changing climate could add between 20 and 30 per cent of GDP to these pressures on debt, while improving the health of the population could reduce them by over 40 per cent of GDP by the mid-2070s."

Prime Minister Keir Starmer on Thursday warned that Britain's state-run National Health Service which relies on massive investment must "reform or die", after an independent report said the venerated institution was in a "critical condition".

Britain is not alone in confronting soaring debt, which has ballooned in recent years owing to the Covid pandemic that saw governments paying out huge amounts to safeguard jobs.

In neighbouring France, debt stands at more than 110 per cent of the country's GDP.

For the UK, "the past two decades have seen the... economy hit by a succession of extraordinary shocks, in the form of a global financial crisis, a pandemic, and an energy crisis", the OBR noted Thursday. - AFP