Watchdog Warns of “Unsustainable” Finances Awaiting Burnham
The Office for Budget Responsibility warned that Britain’s public finances are on an “unsustainable path”, with debt set to climb steeply without tax rises or spending cuts — a tightening it likened in scale to the entire education budget early next decade. The warning frames the economy Andy Burnham is expected to inherit within weeks, alongside today’s oil shock, a sharp rise in borrowing costs and the Bank of England’s finding that a million more homeowners face higher mortgages.
The watchdog’s report is the fiscal weather Burnham walks into: a debt trajectory it calls unsustainable, an ageing population, and the war’s inflation shock all converging on a first Budget he has promised to deliver within existing fiscal rules while also fully funding defence and helping households with the cost of living. Today’s market moves sharpen it — gilt yields near 5% raise the interest bill on that very debt in real time. Something in the arithmetic gives: the rules, the spending, or the tax pledges. Watch the chancellor appointment, the autumn Budget’s response to the OBR, and whether the fiscal rules survive first contact with the numbers.