Warning public debt could soar as population ages

The UK's public debt could soar as the population ages and tax receipts fall, the government's independent forecaster has warned.

The Office for Budget Responsibility said debt could rise to more than 300% of the size of the economy by 2070, up from around 100% currently.

Climate change and geopolitical tensions also posed "significant" risks to government finances, it added.

But it called current government plans to reduce debt "relatively modest".

Public debt is the stockpile of money borrowed by the government over the years to fund its spending.

Chancellor Jeremy Hunt has set a target of getting underlying debt to fall in five years' time.

In a report, the OBR said the 2020s were 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."

It said these shocks had 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."