Prime Minister Rishi Sunak has warned of a ‘profound economic crisis’ and ‘difficult decisions’ ahead – with rumours now swirling that a range of public spending cuts and tax rises are en route. In the coming weeks, Chancellor Jeremy Hunt will set out the 2022 autumn budget. Hunt and Sunak must now plug a rather large hole in the public purse – reportedly up to £40 billion.
All the while, they must contend with the ongoing cost of living crisis leaving people worried about energy costs, food price hikes, mortgage increases and even their pensions.
The fiscal statement was originally due on October 31, but was pushed back. The delay is reportedly to allow Sunak a chance to ‘get under the bonnet’ of proposals to deal with the current crisis. Hunt confirmed that his plan will ‘demonstrate debt falling over the medium term, which is very important for people to understand’.
The Chancellor, who is in charge of the Treasury, added: ‘It’s also extremely important that statement is based on the most accurate possible economic forecasts and forecasts of public finances. ‘And for that reason the Prime Minister and I have decided that it is prudent to make that statement on November 17 when it will be upgraded to a full Autumn Statement.’
This autumn budget will be accompanied by a forecast from the OBR, aka the Office for Budget Responsibility. The forecast, as described on the OBR website, is the independent office’s ‘latest outlook for the economy and public finances’.
Previously, the Halloween date for a financial update was announced by Kwasi Kwarteng during his brief time as Chancellor. Under former PM Liz Truss, Kwarteng announced billions in tax cuts in a September 2022 ‘mini budget’ – dubbed a ‘Growth Plan’ – which ultimately caused the pound to plummet, and eventually led to both politicians departing their roles.
Many ‘mini budget’ policies were scrapped following Truss’ appointment of Hunt as Chancellor, including removing the two-year Energy Price Guarantee in April 2023.
