Chancellor Jeremy Hunt has dashed the hopes of Conservatives on the right by stating that tax cuts will be “virtually impossible” in the upcoming autumn budget. Despite a surprise fall in inflation and lower-than-expected government borrowing, the chancellor remains committed to stringent measures to balance the budget and reduce inflation.
Former Prime Minister Liz Truss and others on the Tory right have been urging Rishi Sunak and the chancellor to reduce the tax burden at the autumn statement on November 22. However, Mr. Hunt has emphasized the lack of “extra headroom” to implement tax cuts while prioritizing Rishi Sunak’s aim to halve inflation to around 5.3 percent this year.
“I really, really wish it was true but unfortunately, it just isn’t,” Hunt stated in an interview. He further explained that the rising costs of long-term debt make tax cuts nearly impossible at this time. Pleading for patience from his party, the chancellor emphasized the importance of sticking to the plan to reduce inflation and interest rates in order to bring down long-term debt costs.
While low-tax Tory MPs have been pushing for income tax cuts, it seems they may have to wait until the Spring Budget, just prior to the general election, for any potential tax relief. In the meantime, the chancellor is reportedly considering cuts to benefits at the autumn statement, a move that has raised concerns about the impact on hard-pressed families.
Despite the Bank of England’s decision to keep interest rates unchanged at 5.25 percent, economists and investment experts predict that further rate increases are unlikely in the near future. This news has been met with relief in the property market as the consecutive rate hikes were feared to have a negative impact on the UK’s economy.
1. Can tax cuts be expected in the autumn budget?
Chancellor Jeremy Hunt has stated that tax cuts will be “virtually impossible” in the upcoming autumn budget due to the need to balance the books and reduce inflation.
2. Why are some Conservative MPs pushing for tax cuts?
Many Conservative MPs, particularly those on the right, believe that tax cuts are necessary to stimulate the economy and reduce the tax burden on individuals.
3. What is the impact of inflation on tax cuts?
Inflation affects the affordability of tax cuts as it influences the cost of borrowing and long-term debt. The Chancellor emphasizes the need to reduce inflation before implementing tax cuts.
4. Will benefits be cut in the autumn statement?
The Chancellor is reportedly considering cuts to benefits in the autumn statement, which has raised concerns about the potential impact on hard-pressed families.
5. What is the Bank of England’s stance on interest rates?
The Bank of England has decided to keep interest rates unchanged at 5.25 percent, leading economists and investment experts to believe that further rate increases are unlikely in the near future. This decision has been met with relief in the property market.