MNI BRIEF: UK Needs 1% Plus GDP Fiscal Consolidation: OBR

The UK needs a fiscal consolidation of more than 1% of GDP just to match day-to-day receipts and spending, the Office for Budget Responsibility said in its detailed fiscal forecasts published Wednesday. The deficit this fiscal year is set to be 19% of GDP and the OBR said that while borrowing falls to 3.9% of GDP by 2025-26 "even on the loosest conventional definition of balancing the books, a fiscal adjustment of £27 billion ... (just over 1 per cent of GDP) would be required to match day-to-day spending to receipts by the end of the five-year forecast period."

The OBR also set out a darker scenario than its central one - with a no deal Brexit further reducing output by 2 per cent initially and by 1.5 per cent at the forecast horizon.