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Experts are urging caution on public spending after this morning’s public finances data, which was worse than expected.
Elliott Christensen, a senior economist at the Resolution Foundation think tank, said:
Stronger growth in the first half of the year contributed to strong tax receipts in July. But it has failed to deliver a wider public finances windfall as the economic impact of conflict in the Middle East has taken its toll on borrowing costs.
The Chancellor’s margin against his fiscal rules is now razor thin, with the healthy headroom of around £24 billion last spring likely to have fallen below £8bn. He should use his first Budget to put the public finances on a firmer footing and ensure that any new policy announcements are fully funded.
