OBR forecasts likely to show £60bn-£70bn hole after Kwarteng’s mini-budget
Kwasi Kwarteng has been handed independent forecasts on the state of the UK finances that are expected to show a hole of more than £60bn left by his sweeping tax cuts and a sharply slowing growth outlook.
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Sir Charlie Bean, a ex-member of the independent watchdog and a former Bank of England deputy governor, said the document would probably show a large shortfall for the exchequer.
“It will be in the order of £60bn to £70bn relative to its previous forecasts,” he said, adding that Kwarteng would face three options: further U-turns on his tax-cutting plans, deep cuts to public spending, or risking the ire of already rattled financial markets by substantially adding to the national debt.
“What he’ll be confronted with, and I don’t think to be honest most observers and MPs have really woken up to this yet, is the extent to which the public finances has deteriorated since the spring,” Bean said.
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