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UK faces $850 billion shortfall in infrastructure spending due to inflation pressures

UK faces $850 billion shortfall in infrastructure spending due to inflation pressures

Posted on October 9, 2024   |  

The UK faces a £700 billion ($850 billion) infrastructure spending gap by 2040 due to rising costs.

A report shows £1.6 trillion in UK infrastructure and capital projects are currently unfunded.

Economic challenges increase project costs and limit necessary investments for the UK’s long-term goals.

If the UK keeps its usual capital spending levels, it could invest £1.8 trillion by 2040 while following current borrowing rules.

Only about half of the £1.6 trillion in unfunded projects could be financed by government investment by 2040, leaving a £700 billion gap.

To fill the remaining gap without government help, private sector investment must more than double from the projected £568 billion by 2040.

This funding gap includes projects for new roads, and railways, decarbonizing public buildings, and improving social infrastructure like hospitals and schools.

If project cost overruns from the last decade happen again, nearly £1 trillion could be added to the gap, plus £390 billion if geopolitical tensions increase and cause economic problems.



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