Tom Harwood has expressed alarm at the Office for Budget Responsibility's latest projections, which showed that UK national debt could soar to 270 per cent of GDP, stating it as "effective bankruptcy."
The OBR's annual Fiscal Risks and Sustainability report, published today, warned that the UK's public finances are in a "relatively vulnerable position" following a series of economic shocks.
Speaking about the bombshell report on GB News, host Emily Carver said: "National debt is projected to rise to 270 per cent of GDP by the early 2070s. It seems a long way off, but it’s not actually that far away."
Director of the Centre for Policy Studies, Robert Colvile responded: "We should be very worried about this. I mean, this should be the main story on the news every single day that unless something is done, unless we change course, the country is in an unsustainable position. Essentially, we’re going to need either very big tax rises or very big spending cuts."
Robert Colvile said that we should be "very worried" about the report
GB NEWS
Tom replied: "I mean, this is the most extraordinary thing about it all. The central projection is that debt is going to go from 100 per cent of GDP, which is bad enough, to 270 per cent of GDP.
"But the report says that if productivity continues to grow at the sluggish pace it’s been growing at over the last few years, 270 per cent would actually be a massive underestimate.
LATEST DEVELOPMENTS:
"It could rise to 647 per cent of GDP. I mean, is there a single country in the world that has debt at that level? That is effectively bankruptcy."
Colvile explained: "We’ve been running the public finances, essentially since the financial crisis, on the basis that something will turn up that somehow productivity growth will snap back into place, that living standards will rise again, that we’ll go back to the world of the ’80s, ’90s and 2000s, and that everything will turn out okay.
"But we’re slowly accepting that it’s not going to happen. I mean, the NHS alone over the next 50 years as the population ages is set to double as a percentage of national wealth.
"As today’s report says, the state pension with the triple lock is marching ever upwards. We saw just the other week that welfare and incapacity spending is expected to rise by £30billion this Parliament.
"And Labour MPs couldn’t even bring themselves to back something that would have taken £5billion off that £30billion."
In the report, the watchdog highlighted that Britain now has "the sixth-highest debt, fifth-highest deficit and third-highest borrowing costs among 36 advanced economies".
At the end of 2024, the UK Government's deficit stood at 5.7 per cent of GDP, approximately 4 percentage points higher than the average for advanced economies.
Public debt has reached 95 per cent of GDP, its highest level since the early 1960s.
Rachel Reeves will have to "massively increase taxes"
REUTERSThe OBR said efforts to restore public finances after the Covid pandemic and energy crisis have "met with only limited and temporary success in recent years", with the fiscal outlook now facing "mounting risks".
The OBR's projections show that without policy changes, national debt is on course to reach 270 per cent of GDP by 2070, up from less than 100 per cent today.
The forecaster warned that if productivity continues at its recent sluggish pace, debt could rise to as much as 647 per cent of GDP.
Most Read
