Sunak to introduce new fiscal rules in autumn budget to cut borrowing

In March’s budget, Sunak said that just one percentage point increase in both inflation and interest rates would cost the UK more than £25bn. Photo: Samir Hussein/WireImage

UK chancellor Rishi Sunak is set to introduce new fiscal rules in the autumn budget to rein in borrowing.

It comes amid fears that a rise in interest rates, and higher inflation, could severely affect public finances.

The finance minister will use next month’s Budget to illustrate Conservative fiscal discipline ahead of the next election, which will commit him to stop borrowing to fund day-to-day spending within three years.

The rules will also require underlying debt to start falling by 2024-25, the Financial Times reported, citing people familiar with the matter. Currently debt stands at around 100% of gross domestic product (GDP).

Public sector net debt was forecast to rise from 84.4% of national income in 2019-20 to 106.2% in 2024-25 following the health crisis.

In March’s budget, Sunak said that just one percentage point increase in both inflation and interest rates would cost the UK more than £25bn.

Read more: Chancellor Rishi Sunak warns UK economy will get 'worse before it gets better'

“Inflation is one of a number of risks to the public finances that we closely monitor,” the Treasury said on Friday. “That’s why the government is taking action to ensure the public finances return to a sustainable footing.”

In August, inflation in the UK rose to 3.2%, up from 2% in July, to hit its highest level since March 2012.

The rise was more than economists’ expectations for a reading of 2.9%, and reflected a jump in food and drink prices, compared to August 2020, when Sunak’s “eat out to help out” discount scheme cut costs.

The 1.2 percentage point increase between July and August was also the largest since records began in January 1997, however, the Bank of England (BoE) said the surge was “manageable and temporary”.

Watch: What is inflation and why is it important?

Due to the coronavirus pandemic, the Treasury’s previous fiscal rules were put on hold, but Sunak said in the spring that he plans to set out “new fiscal rules later in the year, providing economic uncertainty recedes further”.

Rain Newton-Smith, chief economist at the Confederation of British Industry (CBI), said: “Decisions made this autumn at the Budget and Comprehensive Spending Review will define the UK’s trajectory for the decade ahead.”

The CBI called for the UK government to invest in skills, innovation, net zero and to reform taxes to win huge private sector backing. It also urged increases to capital allowances and a new “green” focus to stimulate investment and accelerate decarbonisation efforts.

“When we look back on this decade, it’s crucial we see a government that took decisive action and unlocked investment. A government that went for growth and made big bets for the UK getting ahead of the international competition. A government that resisted the easy, play-it-safe option, and showed the ambition needed to target the big wins,” Newton-Smith added.

Read more: UK public sector borrowing surges to second highest ever for July

It comes as the chancellor is planning to cut the temporary £20 a week uplift to universal credit, which costs £6bn a year, on 6 October. It will be the biggest benefit cut in the history of the welfare state.

Since the start of the crisis in March 2020, the number of people claiming universal credit has doubled from three million to six million.

However, the exact date the people will stop receiving the money depends on when they usually get their payments.

The move has been strongly criticised, with a Labour spokesperson on Thursday saying: “This is a major cut that will affect millions of families across the country.

“We have given Tory MPs the chance to do the right thing. We would expect them to vote on a motion that will have a major impact on people's lives.”

Watch: What is universal basic income?

Internet Explorer Channel Network
News Related

OTHER NEWS

Qatar frustrated with US slow-walking request to buy drones: report

Qatar is voicing their frustration toward the Biden administration for allegedly slow-walking a request to buy advanced drones from the U.S., the Wall Street Journal reported on Sunday. © Getty ... Read more »

China Expects New Covid Outbreak to Worsen in Coming Days

(Bloomberg) — © Getty Images via Bloomberg China Expects New Covid Outbreak to Worsen in Coming Days Most Read from Bloomberg Cities’ Answer to Sprawl? Go Wild. Why Americans and ... Read more »

Trump subpoena? Capitol riot panel chairman says 'nobody's off limits'

The chairman of the House Jan. 6 Select Committee would not rule out subpoenaing former President Donald Trump as part of its investigation into the Capitol riot. © Provided by ... Read more »

Fortnite welcomes Resident Evil's Jill Valentine and Chris Redfield

© Provided by GamesRadar New skins for Chris Redfield and Jill Valentine are coming to Fortnite Two legendary S.T.A.R.S. members are shrugging off Raccoon City and taking an island break ... Read more »

Activision Blizzard is offering players the chance to change their BattleTags

© Provided by GamesRadar Overwatch As Activision Blizzard is giving an Overwatch character a name change, the company has also opened up the opportunity for players to change their BattleTags, ... Read more »

Yami Gautam steals hearts in first Karwa Chauth look; Sonali Bendre flaunts 19 year old wedding lehenga

© Provided by Pinkvilla Last night, on October 24th, many people around the country, especially married women, celebrated the popular Hindu festival of Karwa Chauth. On this day, women fast ... Read more »

Virat Kohli: 'They didn't let us come into the game at any stage'

After India suffered their first defeat to Pakistan in World Cups, losing by ten wickets, Virat Kohli admitted that his side was outplayed. In response to India’s 151 for 7, ... Read more »

A shameful history of Tory dither and delay on banning conversion therapy

In July 2018, the Conservative government promised the UK’s LGBT+ community that they would ban the traumatising, dehumanising practice known as conversion therapy. That month, Theresa May’s government released its ... Read more »

Video: Tragic Molly Russell felt she was 'living in a trap' she said in note before taking her own life - as Facebook whistleblower says Instagram's algorithm could have shown her harmful content BEFORE she search for it 

Read more »

Rogers Communications reiterates support for CEO after ousted chairman's move to regain control

Rogers Building, home of Rogers Communications in Toronto (Reuters) – Rogers Communications Inc reiterated support on Sunday for Chief Executive Joe Natale following attempts by former Chairman Edward Rogers to ... Read more »

Tearing down statues, renaming streets and 'decolonising' lessons is altering history 'without due process' and decision-makers should stand up to 'partisan' pressure groups, report by ex-racism watchdog Trevor Phillips finds

The Policy Exchange think tank released the paper written by Trevor PhillipsThe report claims there is a 'growing trend to alter history without due process'Three museums have backed the paper including Victoria and Albert Museum Read more »

Blast! Space travel leaves you taller... but at risk of suffering chronic back pain, study shows

New research has shown that astronauts can grow up to three inches in spaceThe weightlessness in space causes growth by straightening the spine Study also suggested that 52 per cent of those who go to space have back pain  Read more »

Video: 'Mold, mice and roaches force Howard University students to pitch tents outside or sleep inside the school's common areas' - as protests continue for a second week

Read more »

Calls to patients are FIVE TIMES the cost of those by inmates: Families phoning loved ones on a ward face paying more than crooks ringing home after inmates got price cut

Those using hospital bedside phones face paying more for calls than prisoners The disparity is from an apparent agreement between HM Prison Service and BT The costs of calling landlines during the day have been slashed by 50 per cent Read more »

Juliet Stevenson: ‘As an older woman, you feel vulnerable just going on camera'

Stevenson at the Olivier Awards in 2016 (Getty) So much of life is about ‘trying not to’,” says Juliet Stevenson. “We try not to cry when we’re upset. We try ... Read more »

Gall of the Rolex rippers: The targets are wealthy older men at golf clubs and car parks... the thieves are young women posing as charity workers making bizarre sexual overtures as they pilfer priceless watches

Derek Freestone was sitting in the passenger seat of his friend’s Mercedes, parked in the picturesque fishing village of Emsworth in Hampshire, when two women knocked on the window and asked ... Read more »

Insulate Britain vows to resume blocking roads from today despite risk of jail

Insulate Britain protesters have vowed to restart road-blocking protests today despite the risk of members being jailed or fined for causing traffic chaos. © PA The group said the pause ... Read more »

Titans stun Chiefs on short week after upsetting Bills, but players brush aside growing outside noise

NASHVILLE, Tenn. — The Tennessee Titans sent a statement to the league on Sunday with their 27-3 defeat of the Kansas City Chiefs. Holding Patrick Mahomes and Co. to just ... Read more »

Village that cracked the secrets of eternal life: Residents of Detling live 12 years longer than average. So what has it got that other places haven't? JANE FRYER drops by in search of its elixir

A small village near Maidstone in Kent has the highest life expectancy in BritainDetling's average lifespan for women is 95 -  12 years above the national averageMary Maskell, 98, who lost daughter due to Covid, says secret is to have 'fun' Read more »

How Spencer, The Crown and the internet turned Princess Diana into a Gen-Z queen

Meme queen: Princess Diana in 1995, and Kristen Stewart (left) in ‘Spencer’ and Emma Corrin (right) in ‘The Crown’ (Pool/Liaison/Getty/iStock/Netflix/STX) Timeline dead?” asked one viral tweet in September. “Here’s a ... Read more »

Nationals agree to net zero target by 2050 despite Barnaby Joyce's opposition

Photograph: Mike Bowers/The Guardian Nationals MPs have agreed to sign up to a net zero <a href="/tag/emissions-target“>emissions target by 2050, despite the opposition of leader Barnaby Joyce, in exchange for ... Read more »

Brad Lander's recipe for slamming the housing market to enrich his ‘nonprofit' allies

Councilman Brad Lander (D-Brooklyn) sponsors an anti-landlord measure that’d be the death of small landlords and affordable units. Paul Martinka A misbegotten City Council drive to prevent landlords from harassing ... Read more »

"My reaction still surprises me to this day." 27 mums on the parenting moments that hurt the most.

© Getty Images “My reaction still surprises me to this day.” 27 mums on the parenting moments that hurt the most. This week, my dear 11-year-old son decided that he ... Read more »

ITCZ to cause rains over NCR, other parts of the country

Rain storm weather disturbance umbrellas sickness disease flu prevention disaster announcement monsoon thumbnail generic 178122558 weather-storm weather-rain news-weather rain thumb weather thumbnail The Intertropical Convergence Zone (ITCZ) currently affecting Southern ... Read more »

Risiko-Taktik zahlt sich für Red Bull aus - Verstappen rettet den Austin-Sieg

© xpb Der Grand Prix der USA spitzte sich am Ende zu. Da trafen Max Verstappen und Lewis Hamilton wieder aufeinander, nachdem die unterschiedlichen Strategien sie in der zehnten Runde ... Read more »

Diese Sneakers sind 1,5 Millionen Dollar wert

Diashow ein Waren im Besitz eines Balljungen: «Nike Air Ships»-Schuhe von Michael Jordan. Der Käufer ist ein bekannter Besitzer von Sport-Sammelkarten mit Millionenwert. Schon kurz davor wurden Sneakers von ihm ... Read more »

3 Children Found Abandoned, Skeletal Remains of 4th in Houston House of Horrors

Houston cops carrying out a welfare check on an apartment found a nightmare: three siblings abandoned and living with the skeletal remains of a fourth. © Provided by The Daily ... Read more »

Immanuel Quickley working to avoid potentially diminished Knicks role

The depth of the Knicks roster was illustrated in the double-overtime season-opening win versus Boston last Wednesday. The Knicks, who hosted a rematch against Orlando on Sunday, are stacked at ... Read more »

Five things in China's past shaping Xi's world view

© Getty Images Heightened tensions with Taiwan have focused attention on China, with many wondering where President Xi Jinping sees his country on the world stage. Perhaps the past can ... Read more »

The Post's recommendations on this year's New York ballot questions

A voter fills out the ballot during early voting at Hudson Yards in New York, October 24, 2021. REUTERS/ Bryan R Smith Besides choosing new mayors, DAs and other officials, ... Read more »

Man terrified after ‘I will kill you' written in toothpaste on bathroom mirror

Two men police would like so speak to in connection with a death threat written in toothpaste on a man’s bathroom mirror (Nottinghamshire Police/PA) (PA Media) Police are investigating a ... Read more »

Tears of relief for farmers: Rain falls in drought-stricken Karoo

Farmers in the Karoo were crying — and singing — after rain fell over the area, which has been in the grip of a prolonged drought. But while there were ... Read more »

Angry Barcelona fans swarm around Ronald Koeman's after Clasico loss

© Provided by Daily Mail MailOnline logo Ronald Koeman endured a difficult exit from the Camp Nou on Sunday afternoon as supporters swarmed around his car at the stadium exit. ... Read more »

Married At First Sight's Jo Todd returns to work as a barber after she was FIRED for refusing to get vaccinated

Married At First Sight bride Joanne Todd has returned to work as a barber less than one month after she was sacked for refusing to get the Covid-19 vaccine. The ... Read more »

'Mold, mice and roaches force Howard University students to pitch tents outside or sleep inside the school's common areas' - as protests continue for a second week

On social media, students have shared videos of the unsafe living conditionStudents of the historically black university have organized in tents outside of campus and in sleeping bags inside the social hub and the university center They are demanding a town hall meeting with the university's president before October ends, the release of a housing plan that addresses their concerns 'Sometimes the dorms don't have heating, sometimes the pipes are bursting,' said Jaelan Trapp, a senior at Howard University  Read more »

Hong Kong puts UK to shame with ‘extraordinary' new gay dating show

Hong Kong is getting its first-ever gay dating TV show, to be hosted by out actor Vinci Wong. Boyscation will air on TVs in early November with Wong as both ... Read more »

NASCAR at Kansas results: Kyle Larson's third straight win leaves Championship 4 spots up for grabs

There were three Championship 4 spots up for grabs entering the race at Kansas Speedway on Sunday. After the race, there are still three spots up for grabs. The race ... Read more »

The bumpy road to India's electric car revolution

India sold more electric vehicles in September than any month previously. Sales have been rising since April – the start of this financial year – and are already nearing the ... Read more »

This fearsome, ancient army was made up entirely of gay lovers and endorsed by Plato

In the fourth century BC, a fearsome army named the Sacred Band of Thebes was formed, and it was made up entirely of gay couples. Lawmakers in countries across the ... Read more »

Covid live: more than 325,000 in England get boosters in one day; Romania to tighten restrictions from Monday

© Photograph: Nick Moore/Alamy A busy hospital in the UK. A medical leader has said A&Es are now in a ‘terrible place’ ahead of winter. LIVE – Updated at 00:05 ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic