The Office for Budget Responsibility said challenges from an ageing society, climate change and geopolitical tensions were already posing big fiscal risks.
Finance minister Jeremy Hunt has set a target of getting underlying debt to fall in five years' time, something he was only narrowly on course to hit at the time of his budget statement in March. The OBR said British government borrowing costs have risen more than in any other Group of Seven economy and they had been more volatile than at any time in the past 40 years.
Britain had the shortest average maturity on its debt on record, the highest proportion of inflation-linked debt of any major advanced economy and more of its debt was held by private foreign investors than most other G7 countries, the OBR said.