What does the chart show? The chart shows projections for UK public sector net debt as a percentage of GDP based on five different scenarios. The "central" scenario (the black line), is a "low migration" scenario with a long-term average annual net migration of 140,000. It also assumes a fertility rate of 1.84 and a life expectancy at birth in 2033 of 83.1 years for males and 86.7 years for females. The result of all this is that the estimated population in 2060 would be 77.2m (of which 44.5m are aged 16-65). The other four scenarios (no migration at all in yellow, high migration in green, an older population in red and a younger population in blue) all change one variable.
Why is the chart interesting? At the furthest extreme, comparing an unlikely no-migration scenario with a (possibly just as unlikely) younger population scenario results in very different figures. In the first case, the UK is projected to be hurtling towards a public sector net debt representing 200% of GDP, while in the latter case, the UK can cut its debt to below 40% of GDP. The more likely central case shows an initial dip, before debt levels head back up towards 90% of GDP. Ultimately, such long-term forecasts are rarely accurate, but these predictions do show the potential effect of both age and migration on government finances, with a younger, more migrant population proving to be a better scenario.
The ERC Chart of the Week is updated every Friday.
Want to comment? Head to
PRESS PICKS
Tuesday 4th September
18:30 at the Royal Overseas League, London
Dr Gerard Lyons, Chief Economist at Standard Chartered Bank
"The Shift in the Balance of Economic and Financial Power: What does it really mean?"
For tickets and more information visit the ERC website.
ACTIONS AND FURTHER INFORMATION
I received this email from someone else, but I would like to subscribe.
Please share any feedback or comments with us via email.
Economic Research Council, 55 Tufton Street, London SW1P 3QL
Telephone : 020 7340 6016
