OBR cuts fiscal headroom to £15bn by 2029-30 after Middle East shock, lifts 2027-28 borrowing view to 3.4% of GDP

The OBR projects UK government borrowing of 3.4% of GDP in 2027-28, up from a prior 2.9% view, easing to 1.8% by 2031-32, and cuts fiscal headroom to £15bn by 2029-30 after a Middle East shock. It raised its 2027 inflation forecast to an average 3.4% from 2%, peaking at 3.75% early that year and returning to 2% by 2030. It sees 2026 GDP growth of 1.2% and a 56% probability of meeting its fiscal mandate, down from 59% at Budget 2025.

Detected & updated continuously · Source: Nebula