Box sets » Fiscal risks and sustainability - July 2026
Population ageing was expected to have significant implications for the UK economy. In this box, we explored how an older population could affect labour supply, productivity, and economic growth, and used the UK OLG model to illustrate the potential economic impact of demographic change.
The student loans system has important long-term implications for the public finances. In this box, we explained how student loans affect borrowing and debt through both cash flows and accruals. We also explored our long-term projections for the student loans system and highlighted the sensitivity of these projections to future policy and economic assumptions.
Our long-term projections focus on UK-wide pressures, however many public services are devolved to Scotland, Wales and Northern Ireland. In this box, we explored how demographic trends could affect devolved spending and revenues, highlighting some of the differing implications for Scotland, Wales and Northern Ireland.
Public spending can affect the economy through a range of channels, including health, investment, housing, and labour market outcomes. In this box, we summarised previous analysis of these effects and highlighted that while public spending can have significant long-term economic benefits, its impact on overall economic performance takes time to materialise and is highly uncertain.
The impact of AI on the economy and public finances is highly uncertain. In this box, we explored how AI could affect productivity, the balance between labour and profits, and future tax revenues, highlighting the potential fiscal implications of a lower labour share of income.
Rising debt was expected to increase debt financing costs and weigh on the wider economy. In this box, we used the UK OLG model to explore how higher debt could raise interest rates, crowd out private investment, and reduce GDP per person.