Grim Public Finances
A few quick bullet points:
- Public sector net investment so far this financial year is £8.0bn against £10.9bn last year. Despite all Clegg & Cable’s talk in the past few days about ‘government investment as a stimulus’.
- Welfare spending is up 5% year on year. Nearly twice as much as the OBR forecast (3%).
- Overall borrowing is down 7% this financial year. The OBR predict it will fall by 16% in 2011/12.
That last point is crucial. We are already undershooting the OBR’s target and the economy (according to just about every independent forecaster) is set to slow further.
The November Statement is going to be grim for the government. Not only are the growth forecasts for 2011 and 2012 (and possibly 2013 & 2014) going to be revised down heavily but borrowing is going to be revised up.