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Energy price guarantee, cut in NI and higher interest rates likely to result in double the budgeted deficit for 2022/23, ICAEW says

Author: ICAEW

Published: 21 Oct 2022

Responding to the public sector finance numbers released by the Office for National Statistics today (Friday 21 October 2022), Alison Ring OBE FCA, Public Sector and Taxation Director for ICAEW, said:

“The Chancellor will be relieved that the fiscal situation is not worse as he works to regain market credibility in the wake of his predecessor’s disastrous mini-Budget and the Prime Minister’s resignation.

“The deficit for the first half of the 2022/23 financial year of £73bn was in line with the Office for Budget Responsibility’s spring forecast, as higher receipts, the energy profits levy, and lower capital investment offset the effect on debt interest of both rising interest rates and inflation. 

“Unfortunately, the energy price guarantee scheme for households and businesses, the cut in national insurance from November, and even higher interest rates since the mini-Budget mean the deficit for the full year is expected to be close to double the £99bn budgeted back in March.

“All eyes will now be on the Autumn Statement and the practical difficulties of finding sufficient spending cuts in the medium-term fiscal plan to bring the public finances under control over the next five years. The prospect of tax rises should not be discounted.”


Notes to editors:

View September 2022 public sector numbers.