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Autumn Statement: Government to borrow less this year Autumn Statement: Public finances better off by £27bn
(35 minutes later)
The government will borrow less money this year than was expected to at the time of the Budget in July. Public finances over the next five years are looking £27bn better than they were in July, according to the Office for Budget Responsibility (OBR).
The slight fall in the Office for Budget Responsibility (OBR) forecast from £74.1bn to £73.5bn was announced in the Autumn Statement. The improvement is due to a combination of better tax receipts and lower interest payments on debt, Chancellor George Osborne said in his Autumn Statement.
It means the government can borrow £8bn less over the parliament.
It also means there can be £12bn more investment in capital projects.
The OBR now predicts a small fall in the amount the government will borrow in the current financial year from £74.1bn to £73.5bn. Many analysts had expected the forecast of borrowing this year to increase.
The comparable figure has increased since July because of statistical changes to the treatment of housing associations.The comparable figure has increased since July because of statistical changes to the treatment of housing associations.
The OBR predicts a £10.1bn surplus in 2019-20. The OBR expects borrowing of £49.5bn next year, £24.8bn in 2017-18 and £4.6bn in 2018-19 before the government moves to a surplus of £10.1bn and £14.7bn in the following two years.
Chancellor George Osborne said the reduced borrowing was a result of an increase in the amount the OBR expects in tax receipts and falls in the interest rate the government pays on its debt. The forecasts for growth were barely changed, with the figures for 2016 and 2017 being raised from 2.3% to 2.4% and from 2.4% to 2.5% respectively.
He said that these would combine to mean that the government finances were expected to be £27bn better off over the course of this parliament than had been predicted in July. The predictions for 2019 and 2020 have both been cut from 2.4% to 2.3%.
The chancellor said the forecasts remained relatively high despite the expectations for growth in other countries and world trade being revised downwards.
"The weakness of the eurozone remains a persistent problem [and] there are rising concerns about debt in emerging economies," he said.
Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.
Explained: Which government departments will be affected?
Special report: Full in-depth coverage of the Spending Review and Autumn StatementSpecial report: Full in-depth coverage of the Spending Review and Autumn Statement
Watch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMTWatch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT