Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

UK's Sunak sets out spending plans

Economy Oct 27, 2021 13:41
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak delivers a speech during the annual Conservative Party Conference, in Manchester, Britain, October 4, 2021. REUTERS/Toby Melville/File Photo 2/2

LONDON (Reuters) - Finance minister Rishi Sunak set out multi-billion-pound public investments alongside tight controls on day-to-day outlays in his budget speech and three-year spending plan on Wednesday.

Below are highlights of Sunak's speech in parliament:

ON INFLATION

The House will recognise the challenging backdrop of rising inflation. Inflation in September was 3.1% and is likely to rise further - the OBR expect CPI to average 4% over next year.

The pressures caused by supply chains and energy prices will take months to ease. It would be irresponsible for anyone to pretend that we can solve this overnight.

ON FISCAL POLICY

In terms of our fiscal policy, we are going to meet our commitments on public services and capital investment… …but we are going to do so, keeping in mind the need to control inflation.

ON OBR FORECASTS

They forecast the economy to return to its pre-COVID level at the turn of the year – earlier than they thought in March. Growth this year is revised up from 4% to 6.5%. The OBR then expect the economy to grow by 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years.

In July last year, at the height of the pandemic, unemployment was expected to peak at 12%... The OBR have today revised down their scarring assumption from 3% to 2%.

ON TWO NEW FISCAL RULES

First, underlying public sector net debt, excluding the impact of the Bank of England must, as a percentage of GDP, be falling. Second, in normal times the state should only borrow to invest in our future growth and prosperity. Everyday spending must be paid for through taxation.

ON DEBT AND BORROWING

Underlying debt is forecast to be 85.2% of GDP this year, then 85.4% in 2022-23, before peaking at 85.7% in 2023-24. It then falls in the final three years of the forecast from 85.1% to 83.3%.

Borrowing as a percentage of GDP is forecast to fall in every single year. From 7.9% this year to 3.3% next year, then 2.4%, 1.7%, 1.7% and 1.5% in the following years.

ON INTERNATIONAL AID

I told the House that when we met our fiscal tests, we would return to spending 0.7 percent of our national income on overseas aid... Based on the tests I set out, today’s forecasts show that we are, in fact scheduled to return to 0.7 in 2024-25 – before the end of the Parliament.

ON COVID, HEALTH AND HOUSING

Today’s Budget does not draw a line under COVID; we have challenging months ahead.

We’re investing more in housing, too. With a multi-year housing settlement totalling nearly £24bn.

At the start of this Parliament, resource spending on healthcare was 133 billion pounds ($183 billion). Today's Spending Review confirms that by the end of the Parliament, it will increase by 44 billion pounds to over 177 billion pounds.

FUTURE GROWTH PLANS

Over the long-term the only way to pay for higher spending is economic growth. And if we want to see higher growth, we’ve got to tackle the problem that’s been holding this country back for far too long: Our uneven economic geography.

As we come out of the worst economic shock we’ve ever seen, we've got a choice. To retrench - or to invest. This Government chooses to invest: To invest in our economic infrastructure. To invest in innovation. To invest in skills. To invest in a Plan for Growth that builds a stronger economy for the future.

($1 = 0.7272 pounds)

UK's Sunak sets out spending plans
 

Related Articles

Top 5 Things to Watch in Markets in the Week Ahead
Top 5 Things to Watch in Markets in the Week Ahead By Investing.com - Aug 07, 2022 3

By Noreen Burke Investing.com -- Wednesday’s July U.S. inflation data will be the main highlight in the week ahead after last Friday’s much stronger-than-anticipated...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email