Labour's spending soars to £126bn on debt interest - matching the total budgets for Defence, Housing and Environment

Looking ahead to 2025-26, the Office for Budget Responsibility (OBR) projects total spending to rise even further to £1.35billion.

The Budget 2024 report shows that by 2025-26, public sector spending on defence will reach £83billion, and spending on Housing and environment will reach £44billion.

This total of £127billion matches the total cost of debt interest being paid at £126billion.

In response to these financial pressures, the Government is adopting a new approach to fiscal management as detailed in the Autumn Budget 2024.

A key aspect of the plan is to increase day-to-day spending by an average of two per cent each year from 2023-24 to 2029-30.

This increase aims to enhance public services, such as providing 40,000 more elective medical appointments each week to reduce NHS waiting times.

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The Government is also committing over £100billion to capital investments over the next five years, focusing on areas like transport, housing, and research.

These initiatives are part of a broader strategy to balance responsible financial management with necessary investments in public services and infrastructure.

The OBR has assessed the impact of these decisions, forecasting economic growth to rise to two per cent in 2025 before slowing to 1.6 per cent by 2029.

Public sector investment is expected to average 2.6 per cent of GDP throughout this Parliament, contributing to economic growth.

If this increased investment continues, it should help boost the economy in the long run.

The OBR has confirmed that the Government is on track to meet its new fiscal rules, with the current budget showing a surplus and national debt decreasing as a share of the economy by 2029-30.

These rules are expected to be met early, with a budget surplus anticipated from 2027-28 and decreasing debt by that same year.