Finance Minister Jeremy Hunt gave an autumn statement to parliament on Wednesday setting out tax and spending plans that he hopes will boost Britain's troubled economy ahead of next year's **.
UK Finance Secretary Jeremy Hunt announced before the projected 2024**Tax cuts for workers and permanent investment incentives for businessesto accelerate what appears to be a struggling economy.
Hunt also proposedSubstantial increases in welfare payments and state pensionsand at the same time will be the employee'sThe social security contribution rate was reduced by 2 percentage pointsand to a lesser extent for the self-employed.
The UK's publicly funded national pension will increase by 85%。
The increase is based on average earnings data released in September, in line with the "triple lock-in" policy on pension changes.
The triple lock-in is the commitment to increase the value of public pensions in terms of income level, inflation rate or 2The highest of 5% is the highest of the 5%.
Prior to Hunt's budget update announcement, it was reported that he could raise pensions by a lower figure in order to save the public treasury almost £1 billion a year.
"Today, we have fully delivered on our promise to triple lockdown," Hunt said. He addedThis is "one of the largest cash increases in the history of the National Pension".
Larger-than-expected cuts will begin on an emergency basis in January, which could boost Prime Minister Rishi Sunak's Conservative Party in early 2024, which currently lags behind the opposition Labour Party in opinion polls.
Speaking to parliament in a statement on Wednesday for the fall fiscal update, Hunt said: "In the wake of the global pandemic and energy crisis, we have made difficult decisions to get our economy back on track. ”
Instead of falling into recession, the economy grew. Instead of falling as expected, real incomes have risen. Our plans for the UK economy are working. But the work is not done. ”
Inflation will be more persistent than previously thought, with living standards still 3 below pre-pandemic levels in FY2024 25, according to fiscal sources5%。
The Office for Budget Responsibility said that despite the implementation of new tax cuts, the futureThe overall tax burden for five yearsIt will still rise, reaching post-World War II highs, ie38% of GDP, which is likely to continue into 2020. It has left many Conservatives uneasy about the prospect of an election.
Rachel Reeves, Labour's incoming finance minister, highlighted the weak growth outlook.
After 13 years in power, the economy simply doesn't work. Despite all the promises made today, the situation for the working class is still worse," she said.
Like many other countries, the UK economy is struggling to grow fast enough to meet the huge demands on public spending ranging from healthcare and education to defence. In addition to this, Hunt must also be a 2£6 trillion in debt pays higher interest.
Paul Johnson, director of the Institute for Fiscal Research think tank, said that the debt-to-GDP ratio will only decline slightly in the coming years.
"This really illustrates the huge challenges we face: the level of taxation is very high, the highest in our history, and there are obviously not a lot of public services, partly because we are spending too much on interest on our debt. ”
Hunt noted that OBR's **shows that its public finance goals will be met, so it is expected that in the full budget statement in early 2024, there is a possibility that further pre-election giveaways will be offered to voters.
But OBR said the £13bn ($16.2bn) manoeuvre was less than half the average of his predecessor since 2010, exposed** Financial constraints
Hunt said the announced planned measures will be implemented in:Around £20 billion ($25 billion) of business investment will increase annually over a decade, equivalent to nearly 1% of GDP.
"It's the biggest driver of modern business investment ever," he said.
IFS's Johnson said the change would help the economy in the long run.
In any case, this autumn statement is not all pre-election bribery," he said. "There's something here that's really designed to boost economic growth. ”
But in the short term, the UK economy looks set to grow only slowly.
GDP is expected to grow by 07%, well below the previous outlook of 18% of**.
OBR also stated, economic output will grow by 14% and 19%, down from 25% and 21%。
The UK economy has been struggling with high inflation, and the new OBR** showsNext year's consumer index is expected to be 28%, up from 09%。
Some economists say the tax cuts, combined with a sharp increase in the minimum wage announced on Tuesday, could exacerbate inflation, which the Bank of England has been trying to curb by raising interest rates to a 15-year high.
Philip Shaw, chief UK economist at Investec, said: "It may be a bit excessive to think this will trigger higher interest rates, but it could delay the BoE's move to lower interest rates next year." ”
Sunak promised "responsible" tax cuts this week, given the "mini-budget" turmoil in financial markets triggered last year by his predecessor Liz Truss's larger tax cut plan.
This time last year, the newly appointed Sunak and Hunt raised taxes sharply to quell the chaos in the bond market.
OBR's new note that the pace of borrowing will slow slightly over the next few years – with an average of £700 million less per year than in March.
JPMorgan Chase and Goldman Sachs on Wednesday raised their estimates for the UK's economic growth in 2024 a day after UK Finance Minister Jeremy Hunt announced a cut in national insurance rates.
JPMorgan Chase & Co. posted growth forecasts from 02% to 04%, and Goldman Sachs raised its growth forecast from 06% to 07%。
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