LONDON Britain’s official budget watchdog said rising healthcare costs could make it harder for Chancellor of the Exchequer Philip Hammond to achieve his goal of balancing the government’s budget in the next parliament starting in 2020.
Rising healthcare costs also look set to put the public finances on an “unsustainable” path in the longer term without tax increases or more cuts in public spending, the Office for Budget Responsibility said in a report on fiscal sustainability.
“The fiscal challenge from rising health care costs – assuming that future governments spend more to accommodate them – is substantial over the longer term, but they would also make the current Chancellor’s nearer-term goal of balancing the budget in the next parliament harder to achieve,” the OBR said in a statement.
The OBR’s new projections suggested that rather than moving into surplus, Britain’s budget deficit would rise from 0.7 percent of economic output in the 2021/22 financial year to 1.8 percent by the end of the next parliament in 2025/26.
(Reporting by Andy Bruce; editing by Stephen Addison)