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ICAEW responds to December 2021 public finances

Author: ICAEW

Published: 25 Jan 2022

ICAEW responds to the latest monthly public finance numbers, released by the Office for National Statistics.

Responding to the public sector finance figures for December released by the Office for National Statistics today (Tuesday 25 January 2022), Martin Wheatcroft FCA, ICAEW’s External Advisor on Public Finances, said:

”Today’s numbers highlight the impact inflation is having on the public sector finances, with higher tax revenues collected in December offset by the rising cost of index-linked debt. We expect interest charges to increase further in the next few months as the time lag on index-linked debt catches up with the current 7.5% rate of RPI."

“With borrowing costs low and headroom in forecasts for the next financial year, the temptation will be to delay fixing the public finances in order to tackle the immediate hit to household budgets from anticipated energy prices hikes and higher prices in the shops, so pressure on the Chancellor to postpone or phase-in April’s national insurance rise is likely to grow.”