21 November 2023
If you are covering public sector finances for October, please see the following comment from Lindsay James, investment strategist from Quilter Investors:
"This morning’s data from the ONS shows that debt servicing costs have reversed their recent downwards trajectory due to volatility in the monthly RPI figure which impacts the way they are accounted for.
"This will keep the pressure on Hunt ahead of tomorrow’s Autumn Statement even though tax receipts are rising but there is a newfound leeway coming from the falling inflation figures. Despite the debt-to-GDP ratio hovering near the 100% mark, this set of figures still does fan the flames of speculation about potential tax cuts tomorrow.
"Historically, managing a debt load of this magnitude has been a delicate balancing act. Yet, in the context of this fiscal tightrope, the government's newfound slack is something they will want to take advantage of, hence the change of rhetoric from one of absolutely no tax cuts to potential changes to income tax or national insurance contributions. Tomorrow's Autumn Statement is poised to be a pivotal moment, with the government facing mounting pressure to ease the tax burden.
"As we stand on the cusp of a range of significant fiscal announcements, the nation will be hoping for measures that will not unsteady our trajectory out of the cost of living crisis but serve to invigorate our economy too."
