With the economy and labour market performing well over recent months, the public finances are well positioned to address the most immediate needs arising from the Russian invasion of Ukraine, including the necessary humanitarian response. Temporary and targeted measures to reduce the impact of higher inflation on those households less able to cope with current circumstances are also appropriate.
While our central projections envisage continued improvements in the public finances over the coming years, the outlook is uncertain with significant risks around key determinants of the fiscal position. These include the pace of economic growth, inflation, the likely path of interest rates and the level of corporation tax revenue into the future.