28 May 2020: ICAEW has today published a Fiscal Insight on coronavirus and the public finances, setting out how a huge economic shock combined with unprecedented fiscal interventions are driving a global and UK fiscal crisis.
The Fiscal Insight describes how the global economy is experiencing a major recession with severe consequences for public finances around the world. Whole sectors of the economy have been closed down, while governments have borrowed heavily to finance large-scale fiscal interventions in order to mitigate the damage.
In the UK, there has been a dramatic transformation in the fiscal position with public spending expected to exceed £1tn for the first time, with a fiscal deficit approaching £300bn and net debt rising from £1.8tn to in excess of £2.2tn.
Rebuilding the public finances will be challenging, with sustainable public investment key to driving the economic recovery and a long-term fiscal strategy essential to repairing public finances.