Sunak puts a number on the UK’s tax transition: it seeks up to 50,000 million a year by raising taxes and cutting expenses
The new British Prime Minister, Rishi SunakKeep exploring how to cover The UK’s ballooning tax gapexacerbated by the political turmoil of recent weeks in which his predecessor, Liz Truss, was killed. Out of Downing Street in just a month and a half And the tax reduction program is in dire straits. The Sunak team estimates that up to £50 billion a year could be made by cutting spending and raising taxes.
Claims by Snack and Treasury Secretary Jeremy Hunt have been kept in office by the new the first show, drew attention to the extent that it “the antithesis” of the promises of Gears. In the Mini-budget presented at the end of SeptemberFormer Prime Minister and then Chancellor of the Exchequer and her friend Kwasi Quarting made tax cuts of up to £45 billion a year without funding.
as submitted by financial times Other methods such as BloombergYour age has humiliated the man who led turn gears after, after Kwarteng stopThey want additional space for a £35 billion tax hole, according to Treasury calculations.
In a note a few days ago, Bank of America (BofA) analysts warned of the financial loophole left by Truss: “It was leaked by the media that the OBR (Office of Budget Responsibility, the official body for budget watchdog) estimated 72 billion pounds in annual budget government after the mini-budget. everybody Track changes to date cover about 33 billion pounds out of that hole, leaving 39 billion pounds ahead.
“Advisor Hunt suggested he would find £40 billion a year with spending cuts. this is It seems unbelievable to us. They added that £40 billion would be equivalent to 16.5 per cent of the daily spending of government departments other than health, education and defence.
The idea is that the medium-term fiscal plan that the government will present November 17th –Sunak has postponed it compared to the scheduled date on October 31 At first, credibility in the markets. The new prime minister made it clear that he was delaying the introduction of this package to allow more time to make “correct decisions” about the British economy after the “mistakes” that had been made.
Officials present at the Sunak meetings said Bloomberg Commentary was made that growth could be significantly lower than the latest official forecast by the Office of Budget Responsibility (OBR). This will have an effect Lower tax revenue expectationsWhich will increase the size of the budget gap to be covered, they say.
This £50 billion figure will be lowered if the Bank of England (BoE) can convince financial markets next week that the government’s fiscal plans allow it to raise interest rates lower than previously thought to counter high inflation. Monetary Policy Committee of the Bank of England Will meet to set prices on Thursday.
As in “Great Austerity”
Huge budget adjustment, about 2% of GDP according to the calculations Fwould be equivalent to Chancellor George Osborne’s austerity budget in 2010 If most of the figure is secured through spending cuts. In anticipation, Downing Street has set the stage for highly unpopular tax and spending decisions, including a refusal to commit to raising welfare benefits to the same level as inflation next April.
With not knowing what actions could lead to that number, Downing Street declined to say what it would do with the Conservatives’ 2019 electoral commitment on the so-called “triple lockWhich ensures that state pensions are updated every year according to the highest indicator between inflation and the average increase in wages or 2.5%.
Meanwhile, Hunt is looking to increase the rate Unexpected profit tax for oil and gas producers. Sunack, as an adviser under Boris Johnson, has imposed a 25% energy dividend tax this year on profits made from oil and gas extraction in the UK.
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