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UK government borrowing bonus: Jeremy Hunt has more scope for tax cuts

Ruth Gregory, deputy chief UK economist at the Capital Economics consultancy, said: “The news that total borrowing in 2022/23 was £13.2 billion lower than the Office for Budget Responsibility predicted only a month ago provides the chancellor with more wiggle room to cut taxes/raise spending ahead of the next general election.”

With the next general election approaching, Gregory said, she “wouldn’t be at all surprised to see a further fiscal loosening in the autumn statement, on top of the £21.9 billion (0.8 per cent of GDP) giveaway in 2023/24 announced in the spring”.

Gregory added: “That said, with both parties likely to stick to current plans to bring down public debt as a share of GDP, a sizeable fiscal tightening will still be required after the election, whoever is in charge.”

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