'GDP back to pre-pandemic level by the end of 2021'
27th October 2021
The UK's finances are expected to rebound stronger than previously thought and be back at pre-pandemic level by the "turn of this year", Chancellor Rishi Sunak said in Autumn Budget 2021.
Delivering his speech in the House of Commons, the Chancellor summarised forecasts from the Office for Budget Responsibility, which released its economic outlook report today.
The report says that the economy is now expected to grow by 6.5% in 2021, up from 4% that the OBR had predicted in March 2021 and slightly lower than the International Monetary Fund's prediction of 6.8%.
Despite the economy shrinking by 9.9% in 2020, the Chancellor said the economy would soon return to its pre-pandemic level , spurred by faster growth than we saw earlier this year.
Permanent scarring of the economy over the medium term, however, is expected to be 2%, according to the OBR, with inflation reaching 4.4% next year - and potentially the highest rate seen in the UK for three decades.
Public sector borrowing is set to fall back below £100 billion next year, declining to around £44bn thereafter and £27bn in 2025-26, to bring overall borrowing to zero or in surplus.
The UK tax burden, on the other hand, is set to be 36.2% of GDP by 2026-27 - the highest level since late in the Attlee Government's reign in the early 1950s.
Talk to us for more information on the Autumn Budget.