Fast improving public finances provide backdrop to Chancellor Spring Statement

Commenting on the latest ONS public sector finances for February published this morning, James Smith, Research Director at the Resolution Foundation, said:

“The Chancellor will approach the UK’s latest crisis – the tightest income squeeze in generations, exacerbated by the Russian invasion of Ukraine – with the public finances in better shape than expected, increasing the chance of significant policy action to support families through the tough year ahead.

“The latest data show borrowing for 2021-22 is coming in around is coming in around £26 billion lower than forecast by the OBR back in October, driven by a revenue-rich recovery with tax receipts £37 billion higher than forecast. And while the conflict will raise inflation and lower growth, at the very least the Chancellor will have more room to manoeuvre in the short term.

“The Chancellor should take this opportunity to provide emergency income support to families through this cost of living crisis, starting with a £9 billion boost to working-age and pensioner benefits.”