UK government says country is already in recession, announces tax hikes

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The British Chancellor of Finance, jeremy chaseconfirmed that the country was in recession during the presentation of its fall budget statement on Thursday, which Consider tax increasesincluding an increase in the rate applied to windfall profits by energy companies, and a reduction in the threshold for the top income tax bracket, which will increase the number of filers affected.

During his appearance before the House of Commons, the head of the British Treasury confirmed the forecasts of the Office of Budget Responsibility (OBR)which point to UK GDP growth of 4.2% this year, against 3.8% forecast in March, but point to a contraction of 1.4% in 2023, against growth of 1.8% previously forecast

Regarding inflation, the new macroeconomic picture of the British government anticipate a price increase 9.1% in 2022, above the 7.4% forecast in March, which will moderate in 2023 to 7.4%, instead of the 4% forecast previously. In the longer term, the OBR’s projections point to an increase in the UK GDP 1.3% in 2024, eight tenths less than expected, as well as 2.6% in 2025, compared to the previous forecast of 1.8%, and 2.7% in 2027, one percentage point more than expected, while for 2027 a growth of 2.2% is expected.

During her appearance, the British Chancellor defended that the autumn declaration represents a “balanced path to stability”, with budgetary consolidation estimated at around 55 billion pounds, which involves “making difficult decisions”. “There is a global energy crisis, a global inflation crisis and a global economic crisis. But today, with this plan for stability, growth and public services, we will weather the storm. We do it today with British resilience and compassion,” Hunt said.

“Whoever says there are easy answers is not being honest with the British: some are advocating spending cuts, but that would not be compatible with quality public services,” he said. assuring at the same time that “high taxes hurt business and erode freedom.”

In this way, he asserted that, if low taxes and strong accounts are preferred, that must come first, because inflation eats away at the pound in people’s pockets “even more than taxes”, for which he has pointed out that the expected consolidation is split almost evenly between tax measures and spending measures. “It’s a balanced plan for stability,” he added.

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