The good news is that the measures announced in the budget, combined with the previous decision to freeze energy bills, should reduce the likelihood of a very deep and long recession in the coming year, something that had previously seemed very possible. Together, they amount to a loosening of fiscal policy worth perhaps 6% of UK GDP. These measures come hot on the heels of the decision to freeze household energy bills for two years. But it is likely to be very large, probably bigger than the furlough scheme during the pandemic, and possibly above 4% of UK GDP in its first year alone. The government is now likely to run a budget deficit of more than 9% of GDP this fiscal year.

Source: The Herald September 27, 2022 18:33 UTC