Brexit chaos: £100bn budget black hole

The Autumn Statement takes place on 23 November

The country faces a £100bn black hole in finances after the EU Referendum result.

The chancellor is set to speak about the issue in next week’s Autumn Statement.

Due to the Brexit result and the more recent win for Donald Trump, the UK will see slower growth, higher inflation and weakened business investments.

The Institute for Fiscal Studies has estimated that a weaker economic outlook could well lead to £30bn in additional borrowing by 2019 to 2020. This is before any gains from lower contributions to the EU budget are considered.

The chancellor will be trying to stick to some commitments which he has inherited from George Osborne. The plan is to cut taxes to help families who are “just about managing”.

Economic growth falling and increased debt will “leave the UK economy more vulnerable to risks of another downturn.”

Helen Barnard, head of analysis at the Joseph Rowntree Foundation, told the Financial Times: “The poorest fifth of people in the UK spend £1 in every £6 of their income on food, much more than middle-income earners, so a price rise will have a bigger impact on the household budgets of less wealthy families.”

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