Boris Johnson has announced several expansionary fiscal policies since becoming Prime Minister, which are likely to increase government borrowing and expenditure in the future.
Among the increased spending measures, he has promised more money for no-deal preparations and funding for an additional 10,000 prison places. He has also pledged to speed up the implementation of full fibre broadband and increase school funding. Meanwhile, the Prime Minister has also shown support for plans to raise the higher income tax band to £80,000, in addition speaking favourably about a cut to the rate of tax on company profits.
With the new Prime Minister’s apparent shift in focus away from balancing the government’s budgets, we are likely to see rising levels of borrowing in the coming months. Furthermore, with a recession possibly on the way, government intervention may be needed to stimulate the economy, which would add to the size of the deficit.