| 17 November 2022

Government support tempers recession before consolidation stabilises public debt

Over £100 billion of additional fiscal support over the next two years cushions the blow of higher energy prices – but the economy still falls into recession and living standards fall 7 per cent over two years, wiping out eight years’ growth. Over the medium term, around £40 billion in tax rises and spending cuts – in roughly equal measure – offsets higher debt interest and welfare costs and gets debt falling as a share of GDP. But at 99 per cent of GDP at the forecast horizon, debt is roughly £400 billion higher than forecast in March and interest costs close to historic highs.