UK: Autumn Statement restores some credibility – UOB

Economist at UOB Group Lee Sue Ann reviews the announcement of the UK’s Autumn Statement.

Key Takeaways

“Following weeks of speculation, UK Chancellor of the Exchequer Jeremy Hunt delivered his long-awaited Autumn Statement on Thu (17 Nov). Nicknamed the “memorial service for Trussonomics”, Hunt’s sweeping GBP55bn fiscal plan was based around 3 priorities – stability, growth and public services – as he sought to restore credibility under the new Prime Minister Rishi Sunak’s government.”

“Meanwhile, the independent Office for Budget Responsibility (OBR) now estimates that the UK economy is in recession and that GDP will contract by 1.4% in 2023, while inflation is predicted to hit 9.1% this year and 7.4% next year.”

“We maintain our view of a 50bps move at its 15 Dec monetary policy meeting. But we think the BOE still has a little way to go, given that Hunt as decided to delay much of the pain from the fiscal consolidation, which means that fiscal policy will do little to fight inflation.”