MNI BRIEF: UK Public Borrowing Forecast To Fall To 2.1% GDP

MNI (LONDON) - The Office for Budget Responsibility, in the official Budget arithmetic, has projected a steady decline in public sector net borrowing over the next five fiscal years with the current budget moving into surplus.

The OBR forecasts showed public sector net borrowing falling from 4.5% of GDP in the 2024-25 fiscal year to 2.1% five years ahead. PSNB was projected to be GBP105.6bn in 2025-26, GBP88.5bn in 2026-27, GBP72.2bn in 2027-28, GBP71.9bn in 2028-29 and GBP70.6bn in 2029-30, equivalent to 2.1% of projected GDP, Chancellor Rachel Reeves announced Wednesday.

The central government net cash requirement, the key measure for gilt issuance in 2024-25, was raised by GBP22.3 billion compared to the spring forecast which suggest a smaller rise in issuance than some market observers had predicted. The new gilt remit will be issued at the end of the Budget speech. Reeves also announced that she was setting a new public sector productivity growth goal of 2%. (see MNI INTERVIEW: UK Budget Investment Spending To Curb Rate Cuts )