Autumn Budget 2024 - PwC comments on the economic outlook

Barret Kupelian, Chief Economist at PwC UK, said:

“Today's Budget set out the Chancellor's policy strategy to achieve her vision for the UK economy. It entails higher day-to-day spending and investment in public services (c. 2.2% of GDP) - funded by taxpayers and additional borrowing, in broadly equal measure. All in all, fiscal policy will become looser. 

“Businesses had been expecting to bear some of the cost of higher public spending. Now, with more resources at hand, the onus will be on the government to deliver tangible and rapid improvements in public services - i.e., lower NHS waiting times and improved hard and soft infrastructure, helping fix the supply side of the economy. 

“To allay scepticism, the government has set a 2% productivity improvement target in the public sector. This seems ambitious, given a flat rate of net public sector productivity growth for at least the past decade - but perhaps achievable with the renewed emphasis on capital spending, supported by a new fiscal rule on public investing.  

“The Chancellor's statement today marked a clear break with the past. Many advanced economies around the world are becoming more activist, diverting resources to reflect global challenges in defence, digitalisation, climate change and deglobalisation. The Chancellor's Budget was in part a mirroring of this.”