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PwC comments on ONS November public finances figures

21 Dec 2021

Hoa Duong, economist at PwC UK, says,

"Amidst the possibility of further social distancing restrictions ahead of Christmas to curb the spread of Omicron, the Chancellor is being urged to provide additional financial support to businesses, but his job has become a lot harder in the current climate. 

"Today’s data shows that the UK continues to spend more money than it received in taxes and other income in November, adding a further £17.4bn to the current government deficit, with no meaningful spending cut compared to October.

"However, today’s data shows a slight improvement in the UK’s public finances compared to the previous month, with net debt increasing by £40bn (about 30% less than October). This modest sign of success is, however, at risk of being short-lived as additional social distancing restrictions are being considered.

"Other advanced economies, such as the EU, US, and Japan, have started scaling back their pandemic-era economic support in response to the worldwide inflation surges. The UK is expected to take up a similar approach, and likely to squeeze its spending further. This would pose an additional challenge for Mr Sunak if he wants to support the economy through the Omicron wave without damaging the overall inflation control effort."

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David Bowden

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