MNI BRIEF: UK Borrowing, Debt On Downward Path - OBR Forecasts

UK borrowing and debt-to-GDP are both set to decline when fiscal measures announced in the Autumn Statement are factored in, the Office for Budget Responsibility's updated forecast show, Chancellor of the Exchequer Jeremy Hunt told parliament Wednesday.

Debt as a share of GDP was forecast to fall to 94% at the end of the OBR's five year forecast, having previously been forecast to rise to nearly 100% of GDP. Underlying debt, which excludes the Bank of England transactions, will be 91.6% of GDP in 2023-2024, 92.7% in 2024-25 and 93.2% in 2026-27, before declining in the final two years of the forecast to 92.8% in 2028-29, Hunt said. In October, the debt-to-GDP ratio was 97.8%, the Office for National statistics said Tuesday.

With the BOE running higher debt interest payments on its stock of asset purchases the underlying debt figures are markedly lower than the overall debt-to-GDP figure, which stood at 111.1% in October. Hunt said that borrowing would be lower by GBP0.7 billion in every year compared to the previous forecast, falling from 4.5% of GDP in 2023-24, to 3.0% in 2024-25 and then 2.7%, 2.3%, 1.6% and on down to 1.1% in 2028-29, meeting the fiscal rule that public sector borrowing must be below 3% of GDP.

The OBR expected the economy to grow by 0.6% this year and 0.7% next