{"id":698,"date":"2025-07-17T13:36:20","date_gmt":"2025-07-17T12:36:20","guid":{"rendered":"https:\/\/www.wealth-generation.com\/insights\/?p=698"},"modified":"2025-07-17T13:36:20","modified_gmt":"2025-07-17T12:36:20","slug":"the-uk-is-vulnerable","status":"publish","type":"post","link":"https:\/\/www.wealth-generation.com\/insights\/the-uk-is-vulnerable\/","title":{"rendered":"The UK is ‘Vulnerable’"},"content":{"rendered":"

The Office for Budget Responsibility (OBR) has warned that the UK\u2019s fiscal outlook faces ‘mounting risks’.\u00a0 The OBR is the official watchdog that monitors Government spending and provides economic and fiscal forecasts and assessments.\u00a0\u00a0As part of this remit, it publishes an annual report called\u00a0Fiscal Risks and Sustainability<\/em>, which considers the wider UK economic picture alongside Government spending, taxation, and debt levels.\u00a0\u00a0Its\u00a02025 report\u00a0makes for difficult reading for anyone concerned about the UK\u2019s current precarious finances.<\/p>\n

The OBR says the UK has, on average, a 4% bigger budget deficit than comparable advanced economies.\u00a0 Underlying debt has risen by 24% in 15 years.\u00a0 Public debt is at its highest level since the early 1960s.<\/p>\n

In particular, the OBR has singled out areas such as the state pension triple lock as causes for concern, with its cost being three times higher than initially forecast.\u00a0 In 2012, the average annual cost increase was forecast by the OBR to be \u00a35.2 billion by 2029\u201330.\u00a0 However, this figure is now forecast at \u00a315.5 billion.\u00a0 Chair of the OBR,\u00a0Richard Hughes, said debt would rise to 270% of GDP by 2070 \u2014 up from less than 100% today \u2014 if no changes to fiscal policy were made.<\/p>\n

\u201cThe UK public finances are in an unsustainable position in the long run. The UK cannot afford the array of promises that it has made to the public,\u201d <\/em>he commented.<\/p>\n

 <\/p>\n

The biggest question in all of these negative figures is how the Government intends to ensure it can pay all of its obligations.\u00a0\u00a0With spending cuts\u00a0politically very difficult\u00a0for the Government, and more borrowing hampered by a\u00a0nervous bond market, there are ever-fewer options for Chancellor Reeves to make the numbers add up.<\/p>\n

It now seems inevitable that tax rises will come in the Autumn in order to meet the Government\u2019s spending obligations.\u00a0\u00a0How these tax rises look is impossible to say.\u00a0 Labour categorically ruled out hikes to income tax, VAT, or National Insurance (for employees) in its election manifesto.\u00a0\u00a0Other options include lengthening the freeze on income tax allowances, which Prime Minister Starmer has refused to rule out.\u00a0\u00a0Plenty of other options exist but will likely not come without their own controversies.<\/p>\n

What is really important now, however, is not to panic over potential future tax changes. Financial decisions and changes to portfolios should only be made in full knowledge of the landscape.\u00a0\u00a0The critical risk here is exposing your long-term financial plans to unnecessary risks or liabilities based on rumours of what the Government may or may not do.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Office for Budget Responsibility (OBR) has warned that the UK\u2019s fiscal outlook faces ‘mounting risks’.\u00a0 The OBR is the official watchdog that monitors Government spending and provides economic and fiscal forecasts and assessments.\u00a0\u00a0As part of this remit, it publishes an annual report called\u00a0Fiscal Risks and Sustainability, which considers the wider UK economic picture alongside Government spending, taxation, and debt levels.\u00a0\u00a0Its\u00a02025 report\u00a0makes for difficult reading for anyone concerned about…<\/p>\n

Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":{"0":"post-698","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-current-topics"},"_links":{"self":[{"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/posts\/698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/comments?post=698"}],"version-history":[{"count":1,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/posts\/698\/revisions"}],"predecessor-version":[{"id":699,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/posts\/698\/revisions\/699"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/media\/197"}],"wp:attachment":[{"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/media?parent=698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/categories?post=698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.wealth-generation.com\/insights\/wp-json\/wp\/v2\/tags?post=698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}