According to Friday’s economic data, the UK’s GDP growth in May continued its downward trend. The Office for Budget Responsibility (OBR), Britain’s official forecaster, warned earlier this week that the country faced “daunting” dangers, such as the potential for government debt to triple in size. The public finances in half a century and the economy in a month are two radically different timetables.
Both may have been largely disregarded at another time. Given the renowned volatility of monthly GDP numbers, what does a debt prediction for 2075 even mean? What does this year’s Treasury prediction from 1975 tell us?
However, these disparate charts are laying the groundwork for some difficult decisions that must be made by autumn and difficult decisions about the course of the following six months.
The OBR’s long-term risk and sustainability report was truly unique because of how powerfully its head, Richard Hughes, spoke. He stated that “the UK cannot afford the array of promises that are displayed to the public,” citing plausible estimates on their growth and expense. A pattern of U-turns on tax and expenditure adjustments across several governments was also mentioned in the study.
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