New figures from the Office for National Statistics show that Public Sector New Borrowing in the first half of the financial year was up from last year but £20 billion lower than the OBR forecast back in March. Borrowing in September was also down £1.6 billion from 2022, though that’s still the sixth-highest since monthly records began in 1993. Seeing as OBR forecasts run economic policy, that means there’s a deal of wiggle room…
For all Hunt’s spinning over the inviability of tax rate reductions, the Treasury is hauling in unprecedentedly gargantuan amounts from stealth tax grabs. Economist Julian Jessop says there is clearly room for “some well-targeted tax cuts” in the Autumn Statement. Guido isn’t convinced that Hunt has got the message…
Tories will be rubbing their hands this morning as Rachel Reeves doubles down on Labour’s commitment to “borrowing to invest”, for example £28 billion in “green investment”, and funding everything else with tax. Borrowing is taxation deferred…
Reeves reminds Guido of John McDonnell’s 2017 claim that new borrowing would “pay for itself” and that the “enormous social and financial returns” would make it all worthwhile. When Labour was roundly bashed for its trigger-happy commitments then, the cost of borrowing was at an all-time low. Interest rates are now at 5.25% and Reeves can only promise to delay her flagship borrowing project for so long – the gilt market is already showing nerves at Labour plans. Big government, big spending is in Labour’s DNA. “Iron fiscal rules” can be transient once a party gets into power…
The Institute for Fiscal Studies reports today that this parliament will be the most tax-raising on record. From 2019-20 to 2024-25, tax revenues will increase by 4.2% of the national income, a 30% steeper rate than the next-biggest tax-raising period during Tony Blair’s first term. The IFS report notes “economic developments” have additionally increased tax take, in particular from frozen allowances and stealth tax rises. Inflation is taxation without legislation…
The IFS claims that overall taxation is “middling” when compared to other developed countries but ignores the fact that the UK has increased tax as a proportion of GDP and government spending by more than all major European economies since 2000. Feeding the beast…
Eyebrows will be raised at Tory conference this weekend when Hunt claims that tax cuts are “virtually impossible” while borrowing and inflation are lower than expected. Guido recommends Hunt looks at getting rid of some of the 133,000 new public sector staff hired this year alone…
New data from the Office for National Statistics shows the UK’s budget deficit between April and July was around £11.4 billion less than the Office for Budget Responsibility (OBR) forecast in March’s budget, with the actual figure at £56.6 billion. In July, tax receipts were £3.4 billion higher than twelve months ago. The Chancellor again has more headroom to slash taxes than the OBR gods foretold…
Commenting this morning, Hunt said:
“As inflation slows, it’s vital that we don’t alter our course and continue to act responsibly with the public finances.”
As Julian Jessop points out, borrowing and debt are both still higher than they should be – the way out is to go for growth. The election is about a year away; tax cuts are needed now to lift growth…
The latest figures from the Office for National Statistics (ONS) show public sector net borrowing hit £21.5 billion in March – £200 million higher than expected, and the second-highest March borrowing figure since records began thirty years ago. Annual borrowing reached £139.2 billion in the year to March, the fourth highest in history. It means government debt is now a whopping £2.53 trillion, or 99.6% of GDP. The highest since the early 1960s…
The sliver of ‘good’ news is the government’s debt interest payments fell to £3.9billion in March, which is a fifth of its peak in June last year. Although with the total debt interest payments for the last financial year reaching £106.6 billion, that’s not much to celebrate. For context, the total Health budget for 2022-23 is £180.2 billion.
Part of the explanation for these figures is the decision to extend the energy support scheme in the Budget, with Chancellor Jeremy Hunt saying:
“…We stepped up to support the British economy in the face of two global shocks, but we cannot borrow forever. We now have a clear plan to get debt falling which will reduce the financial pressure we pass onto our children and grandchildren.”
A reminder that Rishi’s third pledge is to reduce the debt, not increase it…
The latest figures from the Office for National Statistics (ONS) show public sector borrowing hit £27.4 billion in December, the highest December figure since records began thirty years ago. £16.7 billion higher than December 2021, and a whopping £21.1 billion more than December 2019, prior to the pandemic…
£17.3 billion of last month’s figure was spent on debt interest alone. That’s two-thirds of the total. For context, the total policing budget in England and Wales for the financial year ending March 2023 is just under £17 billion…
Good news, though: In the financial year-to-December 2022, public borrowing sat at £128.1 billion, £5.1 billion more than 2021… although £2.7 billion less than forecast by the geniuses at the OBR. Small mercies.
