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Spending Review and Autumn Statement

On Wednesday 25 November, the Chancellor will present the joint Autumn Statement and Spending Review to the House of Commons.

The Spending Review will set departmental spending limits for each financial year from 2016/17 to 2019/20. While some departments have protected budgets (including the NHS, some schools spending, defence spending and the international development budget). This means that other departments will see larger reductions, in many cases on top of reductions seen over the previous Parliament.

Public sector net debt increases

Public Sector Net Debt (PSND) was 80.5% of GDP at the end of October 2015 – higher than the 79.4% recorded a year ago. Public Sector Net Borrowing (PSNB) rose by £1.1 billion to £54.3 billion in October 2015 compared to the previous year.

Employment rate reaches record high

The employment rate reached 73.7% in the period July to September 2015, the highest since comparable records began in 1971. The unemployment rate fell to 5.6%, this is the lowest it has been since March to May 2008.

Wages on the rise

Median gross weekly earnings for full-time employees were £528 in April 2015 – an increase of 1.8% on 2014. In real terms, earnings increased by 1.9% compared to 2014 – the first real terms increase since 2008.

Inflation remains negative

The Consumer Price Index (CPI) remained at -0.1% in October 2015, this was the first time that the CPI had fallen on an annual basis for 2 months in a row since the index was created in 1997.

Japan back in recession, interest rates rise on the table for US

Japan fell back into recession in Q3 2015 – annualised GDP contracted at a rate of 0.8% following a fall of 0.7% in Q2.

There is also speculation that the US Federal Reserve will raise interest rates at its December meeting.  

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