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Public Finance

Treasury written question – answered on 26th June 2020.

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Photo of George Howarth George Howarth Labour, Knowsley

To ask the Chancellor of the Exchequer, what estimate he has made of the UK budget deficit by the end of 2020; and what that deficit equates to per household.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Treasury does not publish forecasts of the economy or the public finances; the Office for Budget Responsibility (OBR) is the UK’s official forecaster.

On 14 April, the OBR published a coronavirus reference scenario outlining the potential impact of COVID-19 on the economy and public finances. This was not an official forecast and the OBR highlight that the duration and scale of the economic disruption is highly uncertain. On 14 May the OBR published revised fiscal aggregates and monthly profiles relating to this scenario, estimating PSNB will reach £298.4 billion or 15.2% of GDP in 2020/21. The OBR did not produce an estimate on a per household basis.

While it is clear that the impact of COVID-19 on the economy and the government's necessary response to it will lead to an increase in borrowing this year, the OBR have noted that the costs of inaction would have been greater.

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