U.K. Set for $83 Billion Public Spending Boost, Goldman Says
The U.K. government is set to announce $83 billion of spending on commitments to cut carbon emissions, according to Goldman Sachs.
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The U.K. government could announce an additional 60 billion pounds ($83 billion) of spending next month, using an improvement in the public finances to deliver on commitments to balance regional disparities and cut carbon emissions, according to Goldman Sachs Group Inc.
The budget deficit in the first four months of the fiscal year was running at little more than half the level a year earlier, leaving full-year borrowing on course to significantly undershoot the 10.3% of GDP forecast by the fiscal watchdog in March. The improvement is largely due to a stronger-than-expected economic recovery boosting tax revenue.
“We expect Prime Minister [Boris] Johnson and Chancellor Sunak to take advantage of this headroom, given they have both the political incentive and the parliamentary support to make substantial progress on the ‘leveling-up’ agenda,” Steffan Ball, Goldman’s chief U.K. economist, wrote in a note.
The package of extra spending is expected to comprise 30 billion pounds for Covid-related costs and a further 30 billion pounds for areas such as skills and training, digital connectivity and the push to achieve net zero emissions by the middle of the century, he wrote. Combined, that amounts to around 3% of GDP.
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