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Public sector finances large deficit remains

Wednesday 21 February 2018, Commenting on the Public Sector Finances for January 2018, published today by the ONS, Ross Campbell, ICAEW Public Sector Director, said:

“The job of repairing the public finances, as George Osborne put it ‘fixing the roof while the sun is shining’ is only partly completed.  Despite the headline figures, public finances are still in deficit with no immediate prospect of a return to surplus.  At nearly £1.7 trillion, national debt has reached its highest ever level other than in the aftermath of a major war.  The macro economy is starting to change which means government is vulnerable to increasing inflation and interest rates. 

“A prudent government would be keeping a tight rein on borrowing and expenditure, however the politics of an austerity weary country will weigh on fiscal choices. While monetary policy decisions rest with the Bank of England, a decision to put up interest rates too soon to counter rising inflation could trigger a credit crisis and a fall in taxation. With the upcoming Spring Statement, the Chancellor has a careful balancing act to perform on his economic roof.”

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