Summary
Two recent reports highlight financial challenges the UK is facing. One shows a drop in monthly UK growth, while another warns about long-term risks like increasing government debt. These reports suggest that the UK may need to raise taxes to handle future economic pressures.
Key Facts
- The UK economy, measured by GDP, fell in May.
- The Office for Budget Responsibility (OBR) warns UK debt could reach three times the size of its economy in the future.
- The UK has high debt compared to other advanced economies, ranking sixth highest.
- The government reversed decisions on welfare savings and winter fuel payments recently.
- Local councils spend a large part of their budgets, up to 80%, on social care.
- Increasing defense spending to meet NATO targets will cost around £40 billion per year by 2035.
- The UK government might need to raise taxes by £10 billion to £20 billion in the autumn Budget.
- Recent global changes, like US trade policies, have raised UK borrowing costs.
