Surprise surplus lands the chancellor with a dilemma – but he is unlikely to listen to calls to change course
Inflation is the chancellor’s friend if he only considers his income.
The official figures for the public finances show total tax revenues rose by 13.2% in January from the same month a year ago.
Continue reading...Coalition of 40-plus charities and groups launches amid fears of spending cuts to plug public finances
Pressure is building on the leaders of Britain’s two biggest political parties to support higher taxes on wealth amid growing fears over the impact that a renewed austerity drive would have amid the cost of living crisis.
In an intervention which comes as the new prime minister, Rishi Sunak, considers options for filling a £35bn black hole in the public finances, a new coalition of 40 charities and campaign groups – including Oxfam, Save the Children and Christians Against Poverty – said Britain’s tax system was broken and those who paid the most should “pay their proper share”.
Continue reading...With fiscal statement deferred and mixed government messaging on tax and spending the BoE has little to go on
The Bank of England will next week consider how much to raise interest rates without having received any guidance from the government about its tax and spending policies, after Jeremy Hunt pushed back the date for this year’s “autumn statement”.
Its policymakers meet on 3 November to decide the increase in the cost of borrowing required to tackle a rate of inflation that climbed above 10% in September.
Continue reading...IFS says Kwasi Kwarteng’s mini-budget will leave ministers making serious reductions in public services
Kwasi Kwarteng will need to find £60bn of savings by 2026 to fill the gap left by unfunded tax cuts and the costs of extra borrowing triggered by a panicked reaction on international money markets to the chancellor’s “mini-budget”, according to the Institute for Fiscal Studies.
The UK will also struggle to hit the chancellor’s 2.5% growth target, with economic forecasts by the investment bank Citigroup that the IFS uses to underpin its analysis showing the UK will struggle to grow at more than 0.8% on average over the next five years.
Continue reading...Huge policy changes are needed to get UK back on track – so early publication would give an incomplete picture
The message the government wanted to get out was clear. After less than a month as prime minister, Liz Truss had converted from vocal scourge of Treasury orthodoxy to an active supporter.
Given the fallout in financial markets after the not-so-mini-budget, Truss and her chancellor, Kwasi Kwarteng, laid on a heavily stage-managed meeting on Friday with officials from the Office for Budget Responsibility, the Treasury’s independent economic forecaster, to try to smooth over the mess.
Continue reading...PM and chancellor say they will not publish projections until late November despite them being ready next week
Liz Truss and Kwasi Kwarteng will refuse to release forecasts from the Office for Budget Responsibility (OBR) until more than six weeks after receiving them, despite calls for them to be published as soon as possible.
The prime minister and chancellor said they would only publish the independent forecasts on 23 November alongside a fiscal statement, despite them being ready on 7 October.
Continue reading...Interest on debt payment leaps 70% on a year ago to £7.6bn, a monthly record
Government borrowing was higher than expected in May at £14bn as soaring inflation sent interest payments on the UK’s debt to a monthly record.
The Office for National Statistics (ONS) said debt interest payments leapt 70% on a year ago to £7.6bn, the third highest debt interest payment made by central government in any single month and the highest payment in May on record.
Continue reading...Dame Sharon White follows Tesco chief in urging UK government to help with rising energy and grocery bills
The boss of John Lewis has urged the governmentto intervene with a financial package of support to protect families from the cost of living crisis on the same scale as it did to help the nation deal with the Covid pandemic.
Dame Sharon White, a former second permanent secretary at the Treasury, said the government needed to act urgently as families struggle to pay utility and food costs as energy bills and inflation soars.
Continue reading...Figures improve chances of fuel duty or other tax cuts but inflation drives up cost of government debt
Rishi Sunak has been handed a boost from figures showing lower government borrowing than official estimates on the eve of the spring statement.
The figures come despite a sharp rise in debt interest payments last month amid soaring inflation.
Continue reading...Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bn
The government has been urged to launch a one-off wealth tax on millionaire households to raise up to £260bn in response to the coronavirus pandemic, as the crisis damages Britain’s public finances and exacerbates inequality.
The Wealth Tax Commission – a group of leading tax experts and economists brought together by the London School of Economics and Warwick University to examine the case for a levy on assets – said targeting the richest in society would be the fairest and most efficient way to raise taxes in response to the pandemic.
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