Davy Research

Davy Economics Monthly

UK Autumn Statement preview: time for a bold statement

DAVY VIEW

This year’s Autumn Statement (Wednesday, November 23rd) provides the first opportunity for the UK government to outline a fiscal policy response to Brexit. The job of closing the deficit by 2020 will now be delayed as growth prospects have deteriorated. We doubt the government will look to increase taxes to plug the gap and so will tolerate higher borrowing for longer. In this issue of Davy Economics Monthly, we outline the options available to the Chancellor of the Exchequer, including watering down planned austerity and increasing capital expenditure. With borrowing costs close to historic lows, new investment spending looks compelling. Infrastructure investment is set to rise significantly in the coming years, but two-thirds will be financed by private sources. The question remains whether the government will now choose to supplement this with increased public funding.

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