The Autumn Statement
George Osborne stood up in the House of Commons recently to update MPs on the government's plans based on the latest forecasts for the UK economy from the Office for Budget Responsibility.
The Office for Budget Responsibility report - published twice a year - is its assessment of the UK economy's likely performance over the next five years.
It reports on the state of the public finances and assesses whether the government is likely to achieve its goal of balancing the UK's budget within five years ('balancing the budget' is where spending matches the amount received from things like taxes).
THE KEY ECONOMIC AND BUSINESS POINTS
1. ECONOMIC GROWTH
2011 forecast revised down to 0.9% from 1.7%, 2012 forecast revised down to 0.7% from 2.5%, In 2013, 2014 and 2015, forecast growth will be 2.1%, 2.7% and 3%.
2. GOVERNMENT BORROWING
Borrowing forecast to be £127bn in 2011-12, falling to £120bn, £100bn, £79bn and £53bn in following years, an extra £111bn in total than previously predicted. Debt to GDP ratio to peak at 78% in 2014-5, falling afterwards.
3. TRANSPORT COSTS
The average rise in regulated rail fares to be capped at 6% - 1% above inflation - in January, rather than the 8% cap expected. The planned 3p fuel duty rise in January to be scrapped. But duty will go up by 3p in August.
4. JOBS AND BUSINESS SUPPORT
OBR forecast of total public sector job losses up from 400,000 to 710,000.
The Chancellor announced a credit easing programme to underwrite up to £40bn in low-interest loans to small and medium-sized firms, a £1bn business finance partnership to raise money for medium-sized firms and a Regional Growth regeneration fund to get £1bn in extra funding. The Bank levy will be increased from January.
In addition there will be a £250m support package for energy-intensive firms, with £500m for science.
Business rate holiday relief for small firms has been extended to April 2013
He also announced a £1bn "youth contract" to subsidise six-month work placements for 410,000 young people.
For a detailed summary of the Autumn statement please contact us and we will be delighted to provide you with a copy.