The British Treasury Secretary presented his budget.
(Photo: AP)
London The British government wants to fill the enormous hole in the budget with tax increases and spending cuts amounting to tens of billions of pounds. Treasury Secretary Jeremy Hunt announced in Parliament on Thursday, among other things, that he would freeze the amount of the tax allowance for a further two years until 2028.
That means millions of people will move into higher tax brackets because of rising inflation and higher wages. In addition, the threshold for the top tax rate, which is 45 percent, is to be lowered and will in future apply to annual incomes of £125,140 (EUR 143,260) instead of the previous £150,000.
According to the Bank of England, Great Britain is at the beginning of a long recession. Inflation recently rose to 11.1 percent. Hunt also speaks of a recession. The economy will shrink by 1.4 percent in the coming year. He cited an unpublished estimate by the Office for Budget Responsibility (OBR). Accordingly, unemployment will also rise significantly from the current 3.6 percent to 4.9 percent in 2024.
The Chancellor of the Exchequer presented his budget with tax increases and spending cuts. Hunt promised that the economy would pick up again. The OBR estimates growth at 1.3 percent in 2024, 2.6 percent in 2025 and 2.7 percent in 2026. The measures would also depress high inflation.
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Consumer prices will increase 9.1 percent this year, Hunt said, citing the OBR estimate. For 2023, the experts then predict inflation of 7.1 percent.
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“We’re going to face the storm,” Hunt said. He spoke of difficult decisions that would ensure stability, reduce inflation and balance the national budget. This also includes significantly reducing public spending in some areas. For financing, the excess profit tax for energy companies will be increased from 25 to 35 percent. The Finance Minister also announced higher spending, for example for the ailing NHS health service and schools.
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