Calls for Sunak to “go big” on cost of living support as borrowing costs falls

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RESSURE “gone big” on Rishi Sunak with a support package for today’s life crisis, when the latest data showed government finances in better shape than expected.

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The government borrowed £18.6 billion in April, significantly lower than the city’s forecast and revisions to last year’s figures were down as tax receipts were higher than expected.

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The Office for Budget Responsibility estimates the chancellor will have to borrow £99 billion this year. Today’s figures suggest that he will somehow undercut that forecast.

Simon French at Panamure Gordon said: “Lending of £18.6 billion in April was almost a quarter lower than the same month last year. This would encourage the Treasury to work harder to reduce the deficit with a growing economy and strong labor market.” The Chancellor is facing a huge number of calls to spend more this year, so he will need this good news to come.”

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Paul Dales at Capital Economics said the figures “will increase the pressure on the Chancellor while finalizing an impending support package for families”.

Loan interest payments of £4.4 billion were also lower than expected, giving Sunak both political and financial cover for a support package.

The figures for April were boosted by a controversial increase in national insurance payments that some have called for the chancellor to reverse.

Sunak said: “While we are doing all we can to help families cope with rising prices, inflation is also driving up our spending on loan interest – which is expected to reach £83 billion this year. A responsible approach must be adopted to support people now, while not burdening future generations as well, and we are on track to reduce public debt by 2024-25.”

A controversial move, the abolition of free COVID testing, is also saving government money.

Michal Stelmach, senior economist at KPMG UK, said: “Central government spending on procurement, which includes the NHS Test and Trace program and the cost of vaccines, fell to its lowest level since August 2021 as free testing was phased out and The vaccine rollout had matured. ,

However, the coming months are likely to run out of good fortune for the exchequer as the economic outlook worsens and the cost of living crisis intensifies. A more persistent hit on household disposable income could prompt the government to go ahead and provide additional support, resulting in higher spending. ,

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