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Sharp rise in borrowing set to limit Autumn Statement giveaways
Lower tax receipts and other factors are likely to prompt a sharp upwards revision in borrowing forecasts at this week’s Autumn Statement, analysts have warned.
While growth is expected to rise, Chancellor George Osborne (pictured) is likely to need to borrow more than previously expected, not least in 2014.
The government is estimated to borrow £86.6bn this year but analysts predict the final figure could be as much as £100bn due to weak wage growth and the falling oil price.
The Office for Budget Responsibility (OBR) is expected to raise its borrowing forecast for the year by between £5bn-£10bn as a result.
In a particularly bleak outlook, UBS said the total upwards revision to borrowing figures for 2014 and future years could be as much as £75bn.
In better news for the Chancellor, the UK economy is expected to have grown by 3 per cent in 2014, its fastest pace since 2006.
The OBR is due to revise its UK growth forecast for 2014 up from a March figure of 2.7 per cent . Growth for 2015 will also be revised up from 2.3 per cent to 2.6 per cent , while 2016 growth estimates will remain unchanged.
Osborne’s last Autumn Statement before next year’s general election will take place this Wednesday (3 December).
