Commenting on the Public Sector Finance figures out today from the ONS, Yael Selfin, Chief Economist at KPMG in the UK, said:
“The strong January public finances figures announced today could see government net borrowing for 2016-17 well below OBR’s forecasts in November.
“This gives the Chancellor a bit more room for manoeuvre in his final Spring Budget next month. If the UK economy remains stable over the transition period once Article 50 is triggered, Mr Hammond could meet his objective to reduce the budget deficit below 2 per cent of GDP by 2020-21, while offering a few small giveaways. These could include alleviating the burden on some small businesses impacted by rising business rates, and providing additional support to public services that are under increasing strain, such as the NHS, social care and education.
“However, in these uncertain times, the Chancellor is likely to hold some ammunition back, in case the economy proves weaker in the run up to UK’s departure from the EU, so more significant policy announcements are not likely before the Autumn Budget in November. “
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