Truss Spending May Contribute to £60 Billion Shortfall, FT Says
The UK faces a £60 billion ($69 billion) shortfall by the middle of the decade from a combination of inflation, the rising cost of government debt and the spending plans of Liz Truss, who is favorite to be named the country’s next prime minister on Monday, the Financial Times reported.
Truss’s plans for tax cuts and defense spending would prevent her from abiding by the government’s fiscal rules on UK debt, which is growing increasingly expensive, the newspaper said, citing its own calculations using data from the Office for Budget Responsibility.
While the OBR projected in March that the UK would meet its fiscal rules with about £30 billion to spare, higher debt and welfare costs have wiped that out, according to the FT. This, along with Truss’s intention to reverse national insurance increases, abolish planned corporation tax and bolster defense spending, will radically alter public finances, the newspaper said.
Truss is widely expected to be announced on Monday as winner of the Conservative Party leadership contest, which has seen her taking on former chancellor of the exchequer Rishi Sunak. Whoever does win will become the UK’s next prime minister.
The Telegraph reported that Truss may set out plans for the UK to tackle the energy crisis within 24 hours of taking office if she does win the contest. She aims to hold her first Cabinet meeting on Wednesday morning, the newspaper said.