DAVY VIEW

UK public sector borrowing was £22bn in October, better than expected but still an eye-watering 1% of GDP and will deteriorate as COVID-19 restrictions are tightened. Facing a deficit close to 20% of GDP this year, reports indicate that Rishi Sunak will announce a public sector pay freeze as part of next week’s spending review. This will pose difficult choices for Boris Johnson given poor growth prospects and perhaps undermining his ‘levelling up’ agenda.