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    Home > Headlines > Global 3C warming would hurt UK economy much more than previously predicted, OBR says
    Headlines

    Global 3C warming would hurt UK economy much more than previously predicted, OBR says

    Published by Global Banking & Finance Review®

    Posted on July 8, 2025

    2 min read

    Last updated: January 23, 2026

    Global 3C warming would hurt UK economy much more than previously predicted, OBR says - Headlines news and analysis from Global Banking & Finance Review
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    Tags:GDPsustainabilityUK economyClimate Changefinancial stability

    Quick Summary

    The OBR warns that 3C global warming could severely impact the UK economy, increasing government debt by 74% of GDP and reducing GDP by 8% by the 2070s.

    UK Economy Faces Greater Risks from 3C Global Warming, OBR Warns

    MANCHESTER, England (Reuters) -A rise in global temperatures to almost 3 degrees Celsius (5.4 degrees Fahrenheit) above pre-industrial levels would likely hurt Britain's economy by much more than previously assumed, the Office for Budget Responsibility projected on Tuesday.

    "Taken together, in the 3 degrees central scenario the combined fiscal impacts of climate damage and mitigation could add 74% of GDP to government debt by the early 2070s, relative to our latest long-term projection," the OBR said in its annual Fiscal Risks and Sustainability Report.

    A United Nations report published in October last year said current climate policies would result in global warming of more than 3 degrees Celsius by the end of the century.

    While the OBR reduced its estimate for the cost of transitioning to a net zero economy to 21% of economic output, from 30% in 2021, it bumped up its estimates of the hit to output from climate change.

    The scenario of an almost 3 degrees increase in global temperatures would reduce the level of GDP by 8% in the early 2070s, the OBR said, compared with a previous estimate of 5%.

    It would also increase primary government borrowing - which excludes debt interest payments - by around 2% of GDP, compared with a previous estimate of 1.3%.

    (Reporting by Andy Bruce; Editing by William Schomberg and Susan Fenton)

    Key Takeaways

    • •3C global warming could severely impact the UK economy.
    • •OBR projects a 74% GDP increase in government debt by 2070s.
    • •Climate change could reduce UK GDP by 8% in the early 2070s.
    • •Primary government borrowing may rise by 2% of GDP.
    • •UN reports current policies could lead to over 3C warming.

    Frequently Asked Questions about Global 3C warming would hurt UK economy much more than previously predicted, OBR says

    1What does the OBR predict about the UK's GDP with 3C warming?

    The OBR estimates that an increase of almost 3 degrees Celsius would reduce the level of GDP by 8% in the early 2070s, compared to a previous estimate of 5%.

    2How much could government debt increase due to climate impacts?

    The combined fiscal impacts of climate damage and mitigation could add 74% of GDP to government debt by the early 2070s.

    3What are the updated estimates for transitioning to a net zero economy?

    The OBR has reduced its estimate for the cost of transitioning to a net zero economy to 21% of economic output, down from 30% in 2021.

    4What is the expected increase in government borrowing?

    The scenario of an almost 3 degrees increase in global temperatures would increase primary government borrowing by around 2% of GDP, compared to a previous estimate of 1.3%.

    5What did the UN report say about current climate policies?

    A United Nations report published in October last year indicated that current climate policies would lead to global warming of more than 3 degrees Celsius by the end of the century.

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