UK national debt on track to triple over next 50 years, warns OBR

Government action will be needed to stop the UK national debt spiralling amid pressure from an ageing population and climate change, the fiscal watchdog has warned.

The Office for Budget Responsibility (OBR) said national debt is on an “unsustainable path” and on track to triple against the size of the economy over the next 50 years without “mitigating policy action”.

The latest OBR Fiscal Risks and Sustainability report said the public debt is set to jump to over 270% of gross domestic product (GDP) by the mid-2070s.

UK national debt currently stands at around £2.7 trillion, or 99.4% of GDP, according to estimates from the Office for National Statistics for July.

This sits around the highest levels the UK has seen since the early 1960s.

Ageing population

The latest report highlighted that an ageing population linked to the falling birth rate, fiscal costs from climate change and rising geopolitical tensions are all expected to put increased pressure on Treasury budgets.

Currently, public spending is at almost 45% of GDP for the past fiscal year – its highest sustained level for almost 50 years.

The OBR said these potential pressures could push public spending to over 60% of GDP over the next 50 years.

However, it projected that state revenues – money brought in, predominantly through taxes – are expected to remain at around 40% of GDP.

The report said: “If these pressures and shocks were to materialise as we project, then governments would need to take mitigating policy action to prevent this debt spiral from occurring.”

Chief Secretary to the Treasury Darren Jones said: “The OBR has laid bare the shocking state that our public finances were left in by the previous government.

“That’s why this Government began work immediately to address the inheritance with tough choices on spending alongside ambitious action to drive growth.”