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UK autumn forecast report: We will reduce debt, cut taxes and reward work

He British Finance Minister Jeremy Huntannounced the Fall Forecast Report on Wednesday, stating that “In this statement we will reduce debt, cut taxes and reward work

Conclusions of the report

We will reduce taxes on companies.

The Office for Budget Responsibility (OBR) says the combined impact of these measures will reduce inflation and increase GDP.

The OBR says inflation will fall to the 2% target in 2025.

We will support the BoE to do everything necessary to return inflation to target.

Social benefits for working age will increase by 6.7% compared to the September inflation rate.

We will increase support for housing costs through local housing benefit.

I have decided to freeze all taxes on alcohol until August 1 next year.

We will increase pensions through a full triple lock commitment.

Starting in April 2024, public pensions will increase by 8.5%.

We will spend £104 billion to tackle cost of living pressures.

Global debt will be 94% of GDP at the end of the forecast.

We met our fiscal rule of reducing underlying debt as a percentage of GDP in the last year of the forecast, with double room for maneuver.

The OBR forecasts a public debt/GDP ratio of 91.6% for 2023/24 (March forecast: 92.4%).

For 2024/25, the OBR forecasts underlying public debt as a percentage of GDP of 92.7% (March forecast: 93.7%).

The OBR forecasts lower debt this year and next.

The OBR forecasts show a 2023/24 budget deficit of 4.5% of GDP (March forecast: 5.1% of GDP).

The OBR forecasts indicate a 2024/25 budget deficit of 3% of GDP (March forecast: 3.2% of GDP).

The OBR forecasts indicate a 2025/26 budget deficit of 2.2% of GDP (March forecast: 2.8% of GDP).

The OBR forecasts indicate a 2027/28 budget deficit of 1.6% of GDP (March forecast: 1.7% of GDP).

OBR forecasts show a 2028/29 budget deficit of 1.1% of GDP.

Market reaction

The budget update appears to have little to no impact on the British pound, leaving the GBP/USD pair modestly flat at 1.2535.

Source: Fx Street

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