While the Labour Party inherited a black hole of £22 billion, the economic outlook for the UK looks more positive.
The Chancellor said that the Government aimed to build on this to bring “balance and stability” to economic growth, with a focus on long-term goals.
Looking at the OBR’s forecast, real GDP growth will be:
- 1.1 per cent in 2024
- 2.0 per cent in 2025
- 1.8per cent in 2026
- 1.5 per cent in 2027
- 1.5 per cent in 2028
- 1.6 per cent in 2029
To ensure this economic stability is reflected in the nation’s finances, Rachel Reeves has committed the Government to a new set of financial rules.
Under this new approach to fiscal policy, the Government will not borrow to fund current spending and will instead rely on higher taxes to ensure an end to austerity.
Instead, borrowing will only be reserved for investment that benefits Britain’s future.