{
  "title": "Public Spending Pressures in the UK: United Kingdom",
  "publication": "Selected Issues Papers, July 24, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2024/07/24/public-spending-pressures-in-the-uk-united-kingdom-552418",
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  "summary": "This paper characterizes UK public spending pressures over a ten-year horizon and their implications for public deficits and debt levels.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Paper characterizes UK public spending pressures over a ten-year horizon and their implications for public deficits and debt levels.\n- Analysis based on a ‘bottom-up’ scenario for total public expenditure including implementation of the NHS Long-Term Workforce Plan, public investment to support the Balanced Pathway to Net Zero, and state pension spending under the Triple Lock policy.\n- Scenario is approximately consistent with IMF staff’s baseline projection for the medium term (to FY2029/30) shown in the 2024 Article IV consultation staff report, which assumes real growth in Departmental Expenditure Limits (DEL) of two percent per year after FY2024/25."
    },
    {
      "heading": "Spending scenario and main assumptions",
      "content": "- Bottom-up scenario components include:\n  - Implementation of the NHS Long-Term Workforce Plan.\n  - Public investment to support the Balanced Pathway to Net Zero.\n  - State pension spending under the Triple Lock policy.\n- Baseline assumption: real growth in Departmental Expenditure Limits (DEL) of two percent per year after FY2024/25.\n- Revenue assumption: revenue stabilizes in FY2028/29 at the level projected by IMF staff (40.8 percent of GDP)."
    },
    {
      "heading": "Key projections and fiscal implications",
      "content": "- Under the scenario and revenue assumption, public debt does not stabilize over ten years.\n- Public debt projection: reaching 101.3 percent of GDP by FY2034/35."
    },
    {
      "heading": "Debt stabilization requirements",
      "content": "- To stabilize debt, the primary balance will need to be higher on average after FY2024/25 by:\n  - 0.8–1.4 ppts of GDP per year, depending on:\n    - the time horizon for stabilization (5 or 10 years), and\n    - the target probability of debt stabilization (50 or 75 percent)."
    },
    {
      "heading": "Metadata and classification (from source)",
      "content": "- Author: Andrew Hodge\n- Date: July 24, 2024\n- Pages: 26\n- Series: Selected Issues Paper No. 2024/029\n- Issue: 029\n- Volume: 2024\n- DOI: https://doi.org/10.5089/9798400284397.018\n- Stock No: SIPEA2024029\n- ISBN: 9798400284397\n- ISSN: 2958-7875\n- Subjects: Capital spending, Education spending, Expenditure, Pension spending, Public debt\n- Keywords: article IV consultation staff report, baseline projection, Capital spending, debt, Education spending, expenditure, fiscal policy, Global, Pension spending, public spending pressure, revenue, spending scenario, stabilizing debt, United Kingdom\n\nSource: IMF — \"Public Spending Pressures in the UK: United Kingdom\" (Andrew Hodge, July 24, 2024), https://www.imf.org/en/publications/selected-issues-papers/issues/2024/07/24/public-spending-pressures-in-the-uk-united-kingdom-552418\n\n---\n\n Content in this bundle\n\n- Sipea2024029\n  - Sipea2024029 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2024029 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/07/24/public-spending-pressures-in-the-uk-united-kingdom-552418"
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    "Authors: Andrew Hodge",
    "Published: July 24, 2024",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400284397.018",
    "Paper characterizes UK public spending pressures over a ten-year horizon and their implications for public deficits and debt levels.",
    "Analysis based on a ‘bottom-up’ scenario for total public expenditure including implementation of the NHS Long-Term Workforce Plan, public investment to support the Balanced Pathway to Net Zero, and state pension spending under the Triple Lock policy.",
    "Scenario is approximately consistent with IMF staff’s baseline projection for the medium term (to FY2029/30) shown in the 2024 Article IV consultation staff report, which assumes real growth in Departmental Expenditure Limits (DEL) of two percent per year after FY2024/25.",
    "Bottom-up scenario components include:",
    "Baseline assumption: real growth in Departmental Expenditure Limits (DEL) of two percent per year after FY2024/25.",
    "Revenue assumption: revenue stabilizes in FY2028/29 at the level projected by IMF staff (40.8 percent of GDP).",
    "Under the scenario and revenue assumption, public debt does not stabilize over ten years.",
    "Public debt projection: reaching 101.3 percent of GDP by FY2034/35.",
    "To stabilize debt, the primary balance will need to be higher on average after FY2024/25 by:",
    "Author: Andrew Hodge",
    "Date: July 24, 2024",
    "Pages: 26",
    "Series: Selected Issues Paper No. 2024/029",
    "Issue: 029",
    "Volume: 2024",
    "DOI: https://doi.org/10.5089/9798400284397.018",
    "Stock No: SIPEA2024029",
    "ISBN: 9798400284397",
    "ISSN: 2958-7875",
    "Subjects: Capital spending, Education spending, Expenditure, Pension spending, Public debt",
    "Keywords: article IV consultation staff report, baseline projection, Capital spending, debt, Education spending, expenditure, fiscal policy, Global, Pension spending, public spending pressure, revenue, spending scenario, stabilizing debt, United Kingdom",
    "**Sipea2024029**"
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