Autumn Statement 2022 - Sustainability of public finances may not be fully resolved

Yael Selfin, Chief Economist at KPMG UK, commented

Yael Selfin, Chief Economist at KPMG UK, commented

“The revised set of targets outlined by the Chancellor in the Autumn Statement to secure markets’ confidence in the sustainability of UK public finances may not be as easily met, given that the OBR forecasts have been relatively generous.  

“There is a high probability that real GDP outturn will prove lower than the OBR’s forecast, while inflation remains stickier in the short-term adding to the Government’s expense.

“The current £9.2bn headroom for meeting one of the key longer term rules - the public sector debt as a share of GDP target - could be easily lost as we currently expect GDP to be around 4% lower than the OBR’s forecast by 2027.

“That could mean more difficult decisions ahead in terms of tax rises and cuts to departmental spending.”




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