KPMG comments on today’s public sector finances data

“A wafer-thin fiscal headroom underscores the risks to the outlook” says Michal Stelmach, senior economist at KPMG UK.

“A wafer-thin fiscal headroom underscores the risks to the outlook” says Michal Stelmach,

“As 2022-23 draws to a close, public sector net borrowing came in at £16.7 billion in February, up from £7 billion recorded last year. This was largely driven by a £6.4 billion increase in government spending on subsidies, a large part of which includes energy support for households and businesses, and a £2.9 billion increase in other grants.

“We expect the outlook for public finances to improve over the coming months thanks to an expected £40 billion fall in energy and cost-of-living subsidies in 2023-24, as well as the recent fall in government bond yields and RPI inflation which together determine the cost of servicing debt.

“However, compared to the OBR, our forecast for public finances assumes the level of GDP nearly 3% lower by 2027-28, which could easily wipe the current headroom of £6.5 billion to meet the fiscal rule of falling debt.”




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Notes to Editors:  

   About KPMG UK

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.  

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. 

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