The affordability of the Plan is also under pressure from external economic factors, including rising inflation and unfavourable exchange rate movements. In March 2022 the Office of Budget Responsibility forecast that inflation would reach 8.7% by the end of 2022.47 The Department reported that this would increase cost pressure on the Plan by £2.1 billion, but acknowledged that this estimate might not accurately reflect rising inflation.48 By November 2022 inflation was higher than this forec...

The affordability of the Plan is also under pressure from external economic factors, including rising inflation and unfavourable exchange rate movements. In March 2022 the Office of Budget Responsibility forecast that inflation would reach 8.7% by the end of 2022.47 The Department reported that this would increase cost pressure on the Plan by £2.1 billion, but acknowledged that this estimate might not accurately reflect rising inflation.48 By November 2022 inflation was higher than this forecast, at 10.7%, suggesting that this cost pressure is higher. The Department told us it seeks to mitigate the effect of inflation by using forward purchas Type: conclusion | Number: 18 | Response status: not_addressed Government response: 5.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2023 5.2 The department continuously updates its forecast of the cost of the equipment plan and reviews its affordability through the annual financial planning pr