The UK’s fiscal watchdog has released its first ever assessment of the biggest challenges to the country’s finances.
The Office for Budget Responsibility says the greatest risk to spending is the cost of the health service.
It says by far the biggest pressures are from the ageing population and the high cost of technological advances.
On public sector pay it says “lifting current limits … would pose a fiscal challenge”.
But on Brexit, the report says a large “divorce bill” for leaving the EU would not be a big threat to the UK’s finances.
Instead it argues that trade agreements with the EU other trading partners are more important for the long-term growth of the UK economy.
Other cost pressure include, “the uncertain costs of cleaning up nuclear power stations, compensating victims of clinical negligence and reimbursing tax that the courts determine should not have been collected.
“In the near term the Government may also need to finance an extensive programme of fire safety measures in the wake of the Grenfell Tower tragedy.”