"Rachel Reeves has said Britain can defy gloomy economic forecasts after the fiscal watchdog infuriated ministers by predicting a productivity downgrade would leave her with a 20bn gap to fill in her forthcoming budget. The chancellor said she was determined not to simply accept the forecasts which increase the likelihood she will break a key Labour manifesto pledge not to raise income tax but would instead prove the predictions wrong."
"I'm going to be candid now that the productivity performance we inherited from the previous Conservative government and since the financial crisis has been too weak. Austerity, a chaotic Brexit and the pandemic have left deep scars on the British economy that are still being felt today. But the task facing our country facing me as chancellor is not to relitigate the past or let past mistakes determine our future. I'm determined that we don't simply accept the forecasts but we defy them, as we already have this year."
"As a result, Reeves is facing one of the most difficult budgets in recent years, while she also has to account for reversing the winter fuel cut, abandoning cuts to welfare payments and an expected move to end the two-child benefit cap. However, the Treasury is hopeful that by the time of the budget, the OBR could factor in lower borrowing costs and marginally higher than expected growth, as well as positively scoring policies such as planning reforms and trade deals, to cut the final fiscal gap."
Rachel Reeves faces a potential £20bn fiscal shortfall after the Office for Budget Responsibility plans to downgrade productivity estimates by about 0.3 percentage points. Budget choices may include raising income tax despite a previous manifesto pledge, reversing the winter fuel cut, abandoning welfare cuts and ending the two-child benefit cap. The Treasury hopes lower borrowing costs, slightly stronger growth and positively scored policies such as planning reforms and trade deals will reduce the fiscal gap. Reeves attributes weak productivity to austerity, Brexit and the pandemic, and intends to reject gloomy forecasts and take necessary policy decisions to improve outcomes.
Read at www.theguardian.com
Unable to calculate read time
Collection
[
|
...
]