Economic and Fiscal Update – Quick Guidline

The economic background of Chancellor George Osborne’s fourth Budget speech could hardly have been more challenging. After he declared that the economy was “on the road to recovery” in his December Autumn Statement, some significant obstacles appeared.

Economic and Fiscal Update

Confirmation that the economy shrank by 0.3 percent in the final quarter of last year followed by Moody’s downgrading of the UK’s AAA credit rating. This is the first time since the 1970s that the UK hasn’t held the highest rating possible with this agency.

Manufacturing output fell by 1.5 percent in January, leaving the UK at serious risk of falling into a recession for the third time in five years. Avoiding the triple-dip now looks increasingly unlikely. Against this background, the Office for Budget Responsibility (OBR) revised its forecast for GDP growth in 2013, from 1.2 percent to 0.6 percent.

The OBR now expects 1.8 percent growth in 2014 (revised down from two percent), 2.3 percent growth in 2015, 2.7 percent in 2016 and 2.8 percent in 2017. It projects 600,000 more jobs in 2013 and 60,000 fewer people on employment benefits. The deficit has reduced to 7.4 percent of GDP in 2013, from 11.2 percent in 2009/10.

It’s expected to fall to 6.8 percent in 2013/14 and 5.9 percent by 2014/15. The Government will borrow £114 billion in 2013. Borrowing will then fall year-on-year to £108 billion in 2014, £97 billion in 2015, £87 billion in 2016, £61 billion in 2017 and £42 billion in 2018.

Are you looking for professional tech-savvy tax advisors and accountants in the UK to guide you? Contact us now!

 

Feeling Lost with Finances?
We're Here to Help!

Tax filings
0 +
Accounts filings
0 +
Reviews
0 +

Refer Clients & Earn Up to 10% – Join Our Reward Program!

Request A Callback