The Office for Budget Responsibility warned that the 2020s are “a very risky” era for public finances as multiple shocks have left the country in a “vulnerable position” to tackle an ageing society, a warming planet and rising political tensions.
In a report on Thursday, the UK’s fiscal watchdog said the rapid succession of shocks “has delivered the deepest recession in three centuries, the sharpest rise in energy prices since the 1970s and the steepest sustained rise in borrowing costs since the 1990s”.
These events have pushed government borrowing to its highest level since the mid-1940s, the stock of government debt to its highest level since the early 1960s and the cost of servicing that debt to its highest since the late 1980s.
The government faces, among other challenges, a £23bn increase in state pension spending by 2027-28 compared with the start of the decade, the OBR said.