of which gets worse. Keep in mind of which the projections made in January assumed of which productivity growth, the major determinant of economic growth, could average 2 percent per year into the long run. Yesterday, the OBR downgraded of which judgement to 1.3 percent. While productivity growth has declined across the advanced world from the past decade, the Brexit-stricken U.K. is usually suffering an extra hit by weakening the economic ties with its biggest market, the EU.
In of which brand new context, the earlier forecast of which debt could rise to 250 percent of GDP within 50 years looks like a significant underestimate, to put of which mildly. By reducing projected growth rates for wages in addition to profits, the brand new lower outlook for trend productivity growth steepens the U.K.’s future fiscal hill. Unlike revenues through taxation, which mostly rise in addition to fall in line with the rate of economic growth, future costs coming through the ageing population are independent of economic factors.
The U.K. is usually not alone. various other advanced countries, including the U.S., have similar or often worse demographic trends in addition to are heading from the same direction. Few major advanced nations seem to have prepared due to of which by fixing the roof while the sun is usually shining, with Germany, often criticized for running “excessive” fiscal surpluses, among the exceptions to the rule.