Public finance figures - PwC comments

Published at 10:39 AM on 21 September 2016


Commenting on today's public finance figures, John Hawksworth, chief economist at PwC, said:

"Today's public finance figures, like most other recent economic data, suggest that there has not been a significant immediate hit to the UK economy and to tax revenues following the EU referendum outcome. Public borrowing in August 2016 was almost £1 billion lower than in August 2015 and cumulative public borrowing for the financial year to date was around £5 billion lower than in the same period last year.

"That said, it may still be very difficult for the Chancellor to meet the March Office for Budget Responsibility (OBR) forecast for 2016/17, which envisaged public borrowing being £21 billion lower than the latest estimate for 2015/16.  We expect that the OBR will revise up its borrowing projections materially in November and the Chancellor is unlikely to seek to offset this at a time when the priority is to support the economy in the uncertain period following the Brexit vote.

"We would expect the Chancellor to boost public investment over the next few years in areas like housing and transport in order to offset a potential post-referendum slowdown in private investment. We would also expect him to push back by a couple of years the date by which he aims to eliminate the budget deficit. But we would still expect him to pursue this objective in the longer term as economic conditions permit."



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