Rishi Sunak is poised to announce an additional £60billion of spending next month, using an improvement in the public finances to deliver on commitments to balance regional disparities and cut carbon emissions, Goldman Sachs has reported.
Figures have shown that the budget deficit in the first four months of the fiscal year was running at little more than half the level a year earlier, leaving full-year borrowing on course to significantly undershoot the 10.3 percent of GDP forecast by the fiscal watchdog in March.
The improvement is largely due to a stronger-than-expected economic recovery boosting tax revenue.
Steffan Ball, Goldman’s chief UK economist, wrote in a note: “We expect Prime Minister [Boris] Johnson and Chancellor Sunak to take advantage of this headroom, given they have both the political incentive and the parliamentary support to make substantial progress on the ‘levelling-up’ agenda.”
Mr Ball added that the package of extra spending is expected to include £30billion for Covid-related costs and a further £30billion for areas such as skills and training, digital connectivity and the push to achieve net zero emissions by 2050.
Altogether it amounts to around 3 percent of GDP.
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