UK budget: Healey sets out response to 'global economic storms'
SPY•John Healey said the budget uses some of the fiscal headroom to protect the economy and family budgets. The OBR forecasts growth of 1.2% this year and borrowing falling to 1.8% in 2030/31 and 2031/32.
1. Fiscal headroom and borrowing
Healey said the OBR confirmed headroom against the stability rule of £15 billion in 2029/30, rising to £22 billion in 2030/31. He said the budget puts Britain on track to eliminate the current budget deficit within three years. Borrowing is forecast to fall from 4.2% this year to 1.8% in 2030/31 and 2031/32.
2. Growth and debt forecasts
The OBR upgraded its growth forecast to 1.2% this year, followed by 1% next year and 1.6% in 2028. Healey said the government would use some of the headroom established last year to absorb the impact of the Iran war. Debt as a percentage of GDP is forecast to peak at 83.8% next year and in 2028/29, before falling to 81.7% in 2031/32.
