Inflation and borrowing costs make it less likely PM will be able to tackle debt or cut tax
The Treasury’s tax and spending watchdog is preparing to sound the alarm over the impact of rising interest rates on the public finances, delivering a serious blow to the government’s scope for pre-election tax cuts.
The independent Office for Budget Responsibility will warn that stubbornly high inflation and soaring borrowing costs are adding to the challenges facing Rishi Sunak, making it less likely that he will meet one of his five key pledges – tackling Britain’s public debt.It is understood the OBR will produce a range of scenarios in its annual “fiscal risks and sustainability report” on Thursday, setting out the impact of higher interest rates for the public purse, in a warning that sustained pressure could force it to tear up its official forecasts.
