ISSUE NO. 19 · THURSDAY 27 AUGUST 2026

A demographic bill nobody is contesting, a £125bn loss the Bank keeps choosing to crystallise, and the day an IPO stops being a lottery ticket

£181bn. That is what old-age benefits could cost by 2030 on current projections, and the figure behind it is the larger one: pensions and health together add about 10 per cent of GDP to the tax burden by 2075. Ben Ansell’s report for the IPPR is not forecasting a crisis. It is reading one off the population.

What links it to everything below is that none of these bills are surprises. The Bank of England knows its gilt sales will cost £125bn and sells anyway. The IPO market has known for forty years who collects the first-day pop, and it is not you. A cost you can see coming and choose not to argue about is still a cost — it just arrives without anyone having to defend it.

Below in full: the demographic bill Britain has not costed, why the Bank is the last major central bank still selling bonds into a weak market, and the day an IPO actually becomes worth buying. After those, the numbers, today’s diary, and one calculator worth five minutes.

Lead

Pensions and health will add about 10 per cent of GDP to the tax burden by 2075. Almost nobody is arguing about it.

Ben Ansell, the Oxford political scientist behind the report, builds on Office for Budget Responsibility projections running to 2075. Of that 10 per cent of GDP, the state pension accounts for roughly three percentage points, a large share of it from the uprating guarantee alone — the rule lifting payments by inflation, wage growth or 2.5 per cent, whichever runs highest. Demographic change is not one pressure among many: it makes up two-thirds of rising fiscal pressure by 2050 and four-fifths by 2075, with the share of people over 65 passing a quarter of the population against roughly 18 per cent today. Ansell’s answer is to move money out of income and into wealth deliberately rather than by stealth — council tax and stamp duty scrapped for a proportional property tax at 0.65 per cent, capital gains rates raised to match income tax, and a two per cent national insurance surcharge on pensioners. That last one is where the noise will be, and it is also the only part that tests whether a new fiscal contract means anything. Read the full story →

The Numbers

July’s 2.9% is still the newest inflation reading, and Bank Rate is 3.75% into the 17 September decision. Real pay is holding at 1.4% on the June figures, with pay growth at 4.0% against 2.6% inflation that month. The index below slipped a fraction on Wednesday and is still within 33 points of its twelve-month high.

More News

The Bank of England is the only major central bank still actively selling its QE-era gilts.

Most central banks unwinding their bond piles simply wait for the paper to mature. The Bank sells instead, pushing long-dated supply into a market where UK borrowing costs already sit at multi-decade highs, with long gilt yields at levels Britain has not seen this century. The Bank’s own estimates put the eventual loss from the programme at £125bn, and the Treasury absorbs it the moment it lands rather than spreading it over time. Deutsche Bank expects the committee to cut the annual pace to £50bn next month and stop active sales altogether. The point worth holding onto is that this is a choice, not an accident: the Bank could stop selling tomorrow and let the pile run down on its own, and the losses would still arrive — just slowly enough for a Chancellor to absorb them. Read the full story →

US listings have averaged an 18 to 19 per cent first-day return since 1980. Almost nobody reading this has ever collected it.

That headline pop belongs to whoever bought at the offer price, and the offer price is not on your screen. Allocations are rationed in the deals worth having and freely available in the ones that are not, so subscribing to everything earns far less than the average suggests — you get filled precisely where you would rather not be. The date that matters more is the lock-up expiry, the scheduled point at which insider selling restrictions lift, tradable supply rises and sentiment gets tested again without the launch publicity holding it up. Missing the opening surge costs little; buying while the excitement peaks costs a great deal. The window worth having is the one after the attention has moved on, when a decent business is left compounding in the quiet. Read the full story →

On the Diary

• Today, 9.30am BST — Young people not in education, employment or training (NEET), UK: August 2026. The official read on the entry-level squeeze, and the first hard number since graduate vacancies hit a record low.
• Today, 9.30am BST — Economic activity and social change in the UK, real-time indicators. The fastest series the ONS publishes, and the closest thing to a live look at spending you get this week.
• Tomorrow, 9.30am BST — Household Costs Indices for UK household groups, April to June 2026. Inflation as different households actually experience it, which is where a single 2.9% headline stops being one number.

The Toolbox

One tool from the site each issue, picked to fit what has just happened. Free, no sign-up, and it shows its workings.

State Pension Age & Forecast

“If the argument is about who funds the state pension and for how long, the first thing worth knowing is what yours is currently forecast to be, and the age at which it starts.”

The Close

There is a pattern in today’s three stories, and it is not a comfortable one. Each is a cost that was visible years in advance and got carried anyway. The demographic bill was written by birth rates decades ago and the OBR has been publishing the arithmetic for years. The £125bn gilt loss is the known price of selling rather than waiting, and the Bank is still selling. The first-day IPO pop has gone to the same people since 1980 on terms nobody has ever hidden. None of these is a shock. All of them are a decision about who absorbs the cost, taken mostly by people who will not be the ones absorbing it. The Budget is where the first of those gets made out loud.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB