Posted in: Weekly Round Up
UK Budget: A cautious package with slightly higher borrowing
Chancellor Healey’s Budget aimed to balance continued fiscal consolidation with some support for households and businesses financed by targeted tax measures. Although borrowing is still expected to decline over the next couple of years, higher interest rates and associated debt service costs means that the deficit will be larger than previously projected. The budgetary plans meet the government’s fiscal rules, albeit with slightly less headroom, though compliance is reliant on a slowdown in spending growth in the latter part of the forecast horizon which will be difficult to achieve. Overall, the Budget was broadly in line with market expectations, though some had hoped for more on the growth/productivity agenda.