The Brexit bill? Chancellor Philip Hammond expected to announce £100bn black hole in Autumn Statement

 
William Turvill
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David Cameron Chairs Weekly Government Cabinet Meeting
Philip Hammond has been chancellor since July (Source: Getty)

Chancellor Philip Hammond is expected to reveal a £100bn black hole in government finances in next week’s Autumn Statement.

The estimated figure, built up cumulatively over the next five years, has been linked to the UK’s Brexit vote, because of the deterioration in forecasts since March.

Read more: Public borrowing could overrun by £100bn over the next five years

Accountancy firm PwC estimated earlier this week that public borrowing could overshoot cumulatively by £100bn over the next five years to 2020/21 compared with the Office for Budget Responsibility’s (OBR) forecast before the EU referendum.

The FT, which has dubbed this the “Brexit bill”, today noted that the OBR’s economic forecast is likely to mirror this forecast and other estimates.

PwC expects a continuing budget deficit of around £67bn this year, which is more than £10bn above the previous OBR forecast.

And, with unchanged fiscal policies, the firm said this would only fall to around £18bn by 2019/20, rather than the surplus the OBR forecast in March.

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Earlier this month, the Institute for Fiscal Studies estimated a £14.9bn deficit by 2019/20, rather than the £10.4bn surplus that previous chancellor George Osborne was aiming for.

A Treasury spokesperson said: “The chancellor will set out the fiscal position at Autumn Statement, in the usual way. The chancellor has been clear that we will return the budget to balance in a way that allows us the space to support the economy as needed.”

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