UK fiscal watchdog to release analysis of tax-cutting plan
The U.K.’s Office of Budget Responsibility says it will deliver an initial analysis of the government’s economic plan on Oct. 7 following a meeting Friday with Prime Minister Liz Truss
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Your support makes all the difference.The U.K.'s Office of Budget Responsibility says it will deliver an initial analysis of the government’s economic plan on Oct. 7 following a meeting Friday with Prime Minister Liz Truss.
The pledge came after Truss and Treasury chief Kwasi Kwarteng met with OBR officials amid efforts to ease concerns about unfunded tax cuts that have unleashed turmoil on financial markets.
The meeting was significant because it was the government’s failure to publish the OBR’s analysis of its tax-cutting plans that spooked investors, sending the pound to a record low against the dollar earlier this week and forcing the Bank of England to intervene in the bond market to protect pension funds.
The chairman of the House of Commons’ Treasury committee said the meeting was an opportunity for the government to change course.
Truss and Kwarteng were likely to have “difficult” conversations with the OBR because investors want to see independent analysis showing that their plans won’t push government borrowing to unsustainable levels, said Mel Stride, a member of Truss’ Conservative Party.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
LONDON (AP) — Revised figures show the U.K. economy grew slightly in the second quarter of the year, indicating the country isn’t currently in a recession.
The Office for National Statistics said Friday that gross domestic product increased by 0.2% in the three months through June, compared with the agency’s previous estimate that the economy shrank by 0.1% in the period.
The new estimate means the British economy isn’t technically in a recession, which is traditionally defined by two consecutive quarters of shrinking GDP.
The Bank of England said last week that it expected GDP to fall by 0.1% in the three months through September. That would have put the British economy into a technical recession if the second-quarter figures hadn’t been revised.
The new figures more accurately reflect growth in financial services and the pandemic’s impact on healthcare, the national statistics office said.