United Kingdom Sustainability Issues

The critical environmental and sustainability issues of United Kingdom:

  1. Government Debt

Since the credit crisis of 2008/09, UK debt levels have increased from under 40% of GDP to over 82% of GDP. Reducing debt levels have proved more difficult than the government forecast. In many areas, tax revenues have been falling and political reasons make it difficult to raise tax rates. Whilst tax revenues have been weak, demand for government spending is rising from areas such as pensions (ageing population) and health care (greater demand from the ageing population and more technology).

As of the first quarter of 2018, UK debt amounted to £1.78 trillion, or 86.58% of total GDP, at which time the annual cost of servicing (paying the interest) the public debt amounted to around £48 billion (which is roughly 4% of GDP or 8% of UK government tax income).


  1. Low Economic Growth

One of the main problems facing the UK economy at the present time is weak economic growth, with output below its previous trend rate of growth. The lost output is due to low productivity growth and relatively weak demand. Economic growth for 2019 is predicted at less than 1%.

Low economic growth adversely affects many different economic problems, like fall in real wages and increased ratio of government debt / GDP.


  1. Housing market

House prices have increased faster than inflation, decreasing affordability. This is particularly affecting young people who are not on the property ladder. Cost of renting is increasing faster than inflation. The ratio of house prices to incomes is rising to historical highs. If interest rates increase from the current lows, it could adversely affect homeowners with large mortgages. Consumers have become accustomed to historical lows – if interest rates rise it will cause a rise in loan defaults.


  1. Poverty and inequality

Some progress in poverty reduction was made in the 1990s and early 2000s, but there are still concerns of levels of poverty – especially after housing costs are included. In particular, it is people of working age and children who are experiencing higher levels of poverty in the UK. 


  1. Inflation

Since 2018 – inflation has remained close to the government’s target of 2%. In 2019, inflation has fallen below 2%. However, in recent years, the UK has experienced some cost-push inflation which has contributed to a fall in living standards – unprecedented in post-war Britain. This fall in living standards is exacerbated by rising housing costs. Young people experiencing a squeeze on living standards are seeing the cost of renting (or buying) rise above inflation. For those who do not own a house, there are greater economic costs.