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PwC comment on ONS public sector finances data

21 Jul 2022

Hoa Duong, economist at PwC, says

“Today’s data shows June adding a further £23bn to the current government deficit, the highest level in 14 months and almost twice the amount recorded in May. This means the UK continues to spend significantly more money than it received in taxes and other income, leading to an estimated borrowing of around 12.4% of GDP. This is much higher than the 50-year average of 3.6%, meaning encouraging growth is the key to sustainable public finances strategy.

“This increasing deficit highlights the difficult balancing act facing the new Chancellor of the Exchequer. While tax cuts could ease business cost pressure and encourage growth, this could push up inflation, exacerbating the current pay squeeze. At present this means a choice between focusing on managing the deficit or tackling the cost of living rises, but not both.”  

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David Bowden

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