MNI BRIEF: UK Budget Shows Debt-to-GDP Edging Up
UK forecasts show government on track to meet its fiscal rules but debt-to-GDP rises before dipping in year five.
UK Chancellor of the Exchequer Jeremy Hunt told parliament he would meet his own fiscal rule of having debt falling in the fifth year of the forecast compared to the fourth and public sector borrowing falling below 3% of GDP, although debt-to-GDP will be higher than at present.
Hunt saidt the Office for Budget Responsibility's forecasts were for underlying debt, which excludes the Bank of England, to rise from 91.7% in 2024-25 to 92.8% in 2024-26 and then on up to 93.2% in the two subsequent fiscal year before falling to 92.9% in 2028-29, almost identical to the 92.8% end-point forecast in November, just meeting his fiscal goal. Debt including the BOE was predicted to be 94.3% five years ahead.
The OBR nudged up its 2024 growth forecast to 0.8% from 0.7% and to 1.9% next year from 1.4% but – 0.5% higher than their autumn forecast, with growth coming in at 2% then 1.8% and 1.7% in the final year of the forecast in 2028.