London, November 17
Britain is now in recession and headed towards further shrinkage, the country’s finance minister revealed on Thursday as he tabled his much-anticipated emergency Budget with tax rises impacting millions. Chancellor Jeremy Hunt tabled the Autumn Statement in the House of Commons, cheered on by British PM Rishi Sunak, to lay out government’s plans to get the economy back on track following the shockwaves of a rolled back mini-Budget of predecessor Liz Truss in September.
“There is a global energy crisis, a global inflation crisis and a global economic crisis. With this plan for stability, growth and public services, we will face into the storm.” — Jeremy Hunt
The independent Office for Budget Responsibility (OBR) forecast, published alongside the new Budget, pointed to higher energy prices driven by the Russia-Ukraine conflict as largely to blame for the downturn, with economic growth not expected until 2024. “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 face into the storm. We do so today with British resilience and British compassion. Because of the difficult decisions we take in our plan, we strengthen our public finances, bring down inflation and protect jobs,” Hunt said. The UK Treasury said the plan outlined by him is a targeted package of support for the most vulnerable, to get debt and government borrowing down and to fight inflation in the face of unprecedented global pressures brought about by the pandemic and the Russia-Ukraine conflict.
The total amount of savings from the Budget has been estimated at GBP 55 billion, through raising taxes and cutting spending. With a cut to the top-rate of income tax threshold and freezes on several other taxes, it means millions are set to pay more in taxes in the coming years. The income tax personal allowance and higher rate thresholds are frozen for further two years, until April 2028. The finance minister said he had “tried to be fair” by asking those “with more to contribute more” and avoiding tax rises that “most damage growth”.
Read More: UK in recession, Jeremy Hunt raises taxes