National debt could hit 300% of GDP by 2070s, independent watchdog the OBR warns

Published

2 years ago

July 13, 2023

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The UK’s national debt could hit 300% of GDP by the 2070s because of the string of major challenges still facing national governments after a “rapid succession of shocks”, according to a report for the Treasury.

The independent Office for Budget Responsibility (OBR) laid out how climate change, defence and the fact people are living longer all posed significant, and current, risks at a time when the public finances are already reeling from COVID, cost of living support and higher interest rates.

The national debt hit a 60-year high of £2.56trn in May – equivalent to 100% of national GDP for a year.

The OBR’s fiscal risks and sustainability report stated that the government’s plans for stabilising and then reducing debt as a share of national output were relatively modest by historical and international standards.

That was despite a previous warning from the watchdog, in March, that the UK’s tax burden was on course to hit the highest level since the Second World War by 2027/8.

Its conclusions also stated that as the baby boomer cohort retires and pushes up the cost of the so-called triple lock, state pension spending was expected to be £23bn higher in 2027/8 than at the start of the decade.

It also warned that rising take-up of electric vehicles was expected to cost £13bn a year in lost fuel duty by 2030.

The report, which looks at the long term risks, highlighted a number of immediate financial burdens including a projection that the hit from record long-term sickness in the workforce will cost the state a further £6.8bn this year in benefit payments.

It all makes for grim reading in Number 11 Downing St as the chancellor seeks an opportunity to deliver some goodies to the public ahead of the next election.

That prospect is looking more elusive by the day.

The OBR’s findings were delivered just hours after the latest grim set of statistics covering the economy, with official figures for May showing a contraction for gross domestic product (GDP) of 0.1%.

Perversely, a flatlining economy is actually and temporarily good news for the government and Bank of England as both seek to bring down stubbornly high inflation.

Weaker demand in reaction to rising interest rates is what Bank policymakers are looking for before they can halt the tightening cycle that has resulted in 13 consecutive increases in Bank rate to date.

Rising interest rates, and market expectations for rates, are bad news for the taxpayer as well as wider borrowers, such as mortgage holders, because they have forced up borrowing costs.

Yields, the implied interest rate, on core 10-year UK government bonds hit 2008 financial crisis levels earlier this month.

Many UK IOUs are linked to inflation, making the cost of servicing the existing debt pile worse.

The OBR’s report said: “The 2020s are turning out to be a very risky era for the public finances.

“In just three years, they have been hit by the COVID pandemic in early 2020, the energy and cost-of-living crisis from mid-2021, and the sudden interest rate rises in 2022, whose consequences continue to unfold.

“This 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.

“And they 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.”

Chancellor Jeremy Hunt responded: “In common with many advanced economies, the UK’s level of debt remains elevated following recent global shocks, including the pandemic and energy prices.

“This highlights why it is important to deliver on the Prime Minister’s priority to get debt falling and to control borrowing to avoid adding inflationary pressures and risk prolonging higher inflation.

“That means taking difficult but responsible decisions on the public finances, including public sector pay, because more borrowing is itself inflationary.”

Shadow chancellor Rachel Reeves said: “This report shows just how far we are falling behind our peers, how exposed our economy is, and again highlights that the government is failing to take action in areas like energy security to help get bills down.”

She added: “It’s time for them to step aside and let Labour restore our national economic and financial security, driven by our mission to secure the highest sustained growth in the G7.”

UK

Starmer urges anyone with information on Epstein case to come forward – after Andrew misses Congress deadline

Published

8 hours ago

November 23, 2025

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Starmer urges anyone with information on Epstein case to come forward - after Andrew misses Congress deadline

Sir Keir Starmer has urged anyone with information on the Jeffrey Epstein case to come forward after Andrew Mountbatten Windsor missed the deadline to appear in front of US Congress.

US legislators have criticised Andrew for what they describe as “silence” amid their probe into Epstein after he failed to respond to their request for an interview.

When asked about Andrew missing the deadline and whether the former prince should help the case in any way he can, Sir Keir said on his way to the G20 summit in South Africa: “I don’t comment on this particular case.”

He added that “a general principle I’ve held for a very long time is that anybody who has got relevant information in relation to these kind of cases should give that evidence to those that need it”.

Andrew is not legally obliged to talk to Congress and has always vigorously denied any wrongdoing.

It comes as Marjorie Taylor Greene, a loyal supporter-turned-critic of US President Donald Trump, said on Friday she is resigning from Congress in January.

Ms Greene’s resignation followed a public falling-out with Mr Trump in recent months, as the congresswoman criticised him for his stance on files related to Epstein, as well as on foreign policy and healthcare.

Members of the House Oversight Committee had requested a “transcribed interview” with Andrew in connection with his “long-standing friendship” with Epstein, the paedophile financier who took his own life in a New York prison in 2019 while awaiting trial on sex trafficking and conspiracy charges.

But after saying they had not heard back, Democrats Robert Garcia and Suhas Subramanyam accused Andrew of hiding.

Their statement read: “Andrew Mountbatten Windsor’s silence in the face of the Oversight Democrat’s demand for testimony speaks volumes.

“The documents we’ve reviewed, along with public records and Virginia Roberts Giuffre’s testimony, raise serious questions he must answer, yet he continues to hide.

“Our work will move forward with or without him, and we will hold anyone who was involved in these crimes accountable, no matter their wealth, status, or political party. We will get justice for the survivors.”

It follows Andrew being stripped of his prince and Duke of York titles earlier this month.

He had previously agreed to stop using his titles, but had expected to remain a prince and retain his dukedom, ahead of the publication of the memoirs of the late Ms Giuffre, who had accused him of sexually assaulting her when she was a teenager – an accusation he denies.

UK

Girl, 13, arrested on suspicion of murdering woman in Swindon

Published

8 hours ago

November 23, 2025

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Girl, 13, arrested on suspicion of murdering woman in Swindon

A 13-year-old girl has been arrested on suspicion of murdering a woman in Swindon.

Police said the teenager was detained following an incident in Baydon Close, Moredon, in the Wiltshire town on Friday evening.

Officers responded to reports of disorder inside a house. When they arrived, a woman in her 50s living at the address was found to be not breathing. She was declared dead at the scene.

There were no other reported injuries.

Detective Inspector Darren Ambrose, from Wiltshire Police’s major crime investigation team, said: “This is a serious incident in which a woman has sadly died.

“We have set up a cordon at the address while an investigation is carried out.

“I can confirm that we have arrested a teenage girl in connection with this incident and we are not looking for anyone else.”

Police have asked people not to speculate about the incident online as this could prejudice the case.

A police statement read: “Residents can expect to see an increased police presence in the area while we continue carrying out our enquiries into the woman’s death.

“The suspect remains in custody at this time.”

Police said anyone with concerns should speak with their local neighbourhood policing team, either by emailing or approaching officers in person.

UK

Rail fares to be frozen for first time in 30 years

Published

8 hours ago

November 23, 2025

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Rail fares to be frozen for first time in 30 years

Rail fares are to be frozen for the first time in 30 years, the government has announced.

Ministers promised that millions of rail travellers will save hundreds of pounds on regulated fares, including season tickets and peak and off-peak returns between major cities.

The fare freeze applies to England and services run by English train operators.

People commuting to work three days a week using flexi-season tickets will save £315 a year travelling from Milton Keynes to London, £173 travelling from Woking to London and £57 from Bradford to Leeds, the government said.

The changes are part of Labour’s plans to rebuild a publicly owned Great British Railways. Other planned changes include tap in-tap out and digital ticketing, as well as investing in superfast Wi-Fi.

Chancellor Rachel Reeves said the government was introducing a freeze on rail fares for the first time in 30 years, which “will ease the pressure on household finances and make travelling to work, school or to visit friends and family that bit easier”.

“We all want to see cheaper rail travel, so we’re freezing fares to help millions of passengers save money,” Transport Secretary Heidi Alexander said.

“Commuters on more expensive routes will save more than £300 per year, meaning they keep more of their hard-earned cash.”

Rail unions and passenger groups welcomed the move, praising how it will make travel more affordable for passengers and promote more sustainable travel alternatives.

Eddie Dempsey, general secretary of the Rail, Maritime and Transport union, said: “More affordable fares will encourage greater use of public transport, supporting jobs, giving a shot in the arm to local economies and helping to improve the environment.”

TUC general secretary Paul Nowak said the rail fare freeze “will be a huge relief to working people”.

“This is the right decision, at the right time, to help passengers be able to afford to make that journey they need to take, and to help grow our railway in this country, because the railway is Britain’s green alternative – taking cars and lorries off our congested roads and moving people and goods safely around our country in an environmentally-friendly way,” Mick Whelan, general secretary of the train drivers union Aslef, said.

The Tories welcomed the move but said the government was “late to the platform”.

Shadow transport secretary Richard Holden said: “In government, the Conservatives kept fares on the right track with below-inflation rises and consistently called for no further hikes to protect hard-working commuters.”