Commenting on the latest ONS public sector finance data, Gora Suri, economist at PwC UK, says:
“Public sector debt is now equal to the size of the UK economy. The August public finances figures highlight the challenging fiscal position facing the Chancellor ahead of her first budget on 30th October. Public spending is not expected to come down in aggregate terms, however, we could see pockets of spending being redirected to areas where needs are more pressing (e.g. healthcare and education).
“One option for Labour is to tinker with the fiscal rules to take some pressure off public finances, particularly the net debt rule which states that debt as a share of GDP should be falling by the end of the forecast horizon. Labour could tweak this rule by altering the definition of net debt (e.g. by excluding Bank of England debt from the calculation) or by changing the number of years it takes to reach that target.”
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