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UK: FT Correct Size of UK Blackhole to £40bln, From Prior £25bln

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  • Correction for that earlier FT story on the UK's "£25bln" black hole - the FT have formally updated the piece on their website to (correctly) read: Reeves to target black hole of £40bn in Budget - a pretty major uprevision. Confirmed in the text also: "UK chancellor Rachel Reeves is to target a fiscal hole of about £40bn in her Budget this month — far bigger than previously expected — as she looks to patch up the NHS and Britain’s ailing public services." - https://www.ft.com/content/a209fbc7-1c35-478b-8a87-b8d4070e736a
  • A £40bln black hole is certainly significantly larger than other figures that had done the rounds - namely £22bln and £25bln in recent weeks.
  • The pieces suggests that estimates of that size will mean "larger-than-expected tax rises, welfare cuts or spending reductions in the October 30 Budget"
  • The upsizing of the black hole seems to stem from an added fiscal buffer against her “golden rule”, with the FT writing that this adds "billions of pounds to the total required. The Financial Times has been told by officials close to the Budget process that the combined total would be about £40bn."
  • Just this week, the UK PM refused to rule out an increase in employer national insurance contributions, but also stated that reports of capital gains tax being raised to 39% were "wide of the mark".
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  • Correction for that earlier FT story on the UK's "£25bln" black hole - the FT have formally updated the piece on their website to (correctly) read: Reeves to target black hole of £40bn in Budget - a pretty major uprevision. Confirmed in the text also: "UK chancellor Rachel Reeves is to target a fiscal hole of about £40bn in her Budget this month — far bigger than previously expected — as she looks to patch up the NHS and Britain’s ailing public services." - https://www.ft.com/content/a209fbc7-1c35-478b-8a87-b8d4070e736a
  • A £40bln black hole is certainly significantly larger than other figures that had done the rounds - namely £22bln and £25bln in recent weeks.
  • The pieces suggests that estimates of that size will mean "larger-than-expected tax rises, welfare cuts or spending reductions in the October 30 Budget"
  • The upsizing of the black hole seems to stem from an added fiscal buffer against her “golden rule”, with the FT writing that this adds "billions of pounds to the total required. The Financial Times has been told by officials close to the Budget process that the combined total would be about £40bn."
  • Just this week, the UK PM refused to rule out an increase in employer national insurance contributions, but also stated that reports of capital gains tax being raised to 39% were "wide of the mark".