STORY: Britain’s government is set to borrow $61.4 billion more between now and the end of the decade than expected five months ago.
That’s according to forecasts from the country’s fiscal watchdog on Wednesday (March 26).
As finance minister Rachel Reeves began a half-yearly budget update speech to parliament, the Office for Budget Responsibility said the public finances outlook had deteriorated.
It also said prospects for the economy were down, and now forecasts Britain’s economy to grow by 1.0% this year.
That’s half the estimate it gave in October.
Although it slightly increased its projections for three of the four following years.
Reeves announced she had rebuilt a $12.8 billion fiscal buffer that was wiped out by weaker economic forecasts and rising borrowing costs since her first full budget last year.
“As a result of the steps that I am taking today I can confirm that I have restored in full our headroom against the stability rule, moving from a deficit of £36.1 billion in 2025-26 and £13.4 billion in 2026-27 to a surplus of £6.0 billion in 2027-28, £7.1 billion in 2028-29 and a surplus of £9.9 billion in 2029-30.”
Reeves said she’s aiming to balance day-to-day public spending with tax revenues by 2030.
She added day-to-day public spending would grow by 1.2% a year in real terms, slightly slower than her previous plan.
The government had previously announced planned savings from welfare, angering some lawmakers from the governing Labour Party.
Looking ahead, the OBR expects economic output to expand by 1.9% in 2026.
And average 1.8% a year over the rest of the forecast.
That compared with the OBR’s previous expectations for growth of 1.8% in 2026 and 1.5% in 2027.
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