The UK Office for Budget Responsibility (OBR), a public independent fiscal watchdog, is preparing to warn the UK government of the impact of rising interest rates on public finances, threatening the government plans to cut taxes and tackle state debt, The Guardian reported on Wednesday
MOSCOW (Pakistan Point News / Sputnik - 12th July, 2023) The UK Office for Budget Responsibility (OBR), a public independent fiscal watchdog, is preparing to warn the UK government of the impact of rising interest rates on public finances, threatening the government plans to cut taxes and tackle state debt, The Guardian reported on Wednesday.
The OBR is expected to present its analysis of the impact of higher interest rates on the fiscal policy in its annual "fiscal risks and sustainability report" on Thursday, the newspaper said. The watchdog will sound the alarm over challenges high inflation and increasing interest rates present for the financial sector and UK Prime Minister Rishi Sunak's plans to improve the economic situation, the report added.
In early 2023, Sunak introduced "five pledges," with three of them � halving inflation, reversing debt growth and expanding the economy � focusing on economic issues. The conclusions by the OBR are expected to make it less likely that the prime minister will meet his goal of tackling the public debt, the newspaper opined.
In late June, the Bank of England decided to raise its base interest rate by 50 points to 5%, the highest figure since 2008.
The United Kingdom, along with other European countries, has been facing inflation and a massive energy crisis as part of the post-pandemic global economic recession. The situation has further exacerbated against the backdrop of the Ukraine crisis as hostilities and Western sanctions against Moscow have led to disruptions of supply chains and other rising prices.
