Britain’s public finances are losing around $442 billion a year due to weak economic growth, population ageing and ill health, according to estimates from a think tank. The left-leaning Resolution Foundation said the next prime minister needs a new fiscal strategy to stop borrowing, public spending cuts and tax increases from becoming more painful.
Fiscal Challenges
About two thirds of the $442 billion hole comes from a slowdown in economic growth per person since 2007, it said. The think tank also suggested replacing the triple lock system for increasing the value of state pensions with a less expensive link to average earnings alone, and reforms to replace fuel duty receipts which are being lost as drivers switch to electric cars.
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