"The rebuke comes amid reports of mounting anger inside Downing Street after the OBR signalled it would downgrade productivity forecasts ahead of next month's Budget - creating an estimated £27 billion shortfall and forcing Ms Reeves to consider a mix of tax rises or spending cuts to plug the gap. The downgrade is expected to knock 0.3 percentage points off productivity growth assumptions, deepening the Chancellor's headache as she prepares her first full Budget under strict fiscal rules."
"Ms Reeves and Sir Keir Starmer are said to believe the downgrade reflects the long-term impact of Conservative policy failures dating back to the post-financial crisis era and Brexit. But Mr Hunt said the current crisis was one of Labour's own making. 'It is ridiculous to blame the OBR and tax cuts that grew the economy when Labour's tax rises actually shrunk it,' he told reporters. 'Rather than trying to find someone to blame, they need to start getting a few decisions right.'"
"As chancellor, Mr Hunt cut National Insurance contributions twice ahead of last year's election at a cost of £20 billion. Ms Reeves has since imposed a £25 billion increase in employers' National Insurance, part of a broader fiscal tightening that economists say has pushed the UK tax burden to a record high. The Chancellor has been left with only £9.9 billion of headroom against her fiscal targets - the smallest margin in more than a decade, and well below the £20-30 billion cushions maintained by previous governments. Economists now estimate that Ms Reeves faces a £35 billion black hole in her upcoming Budget, limiting her ability to deliver on"
The OBR signalled a downgrade to productivity forecasts that creates an estimated £27 billion shortfall ahead of the Budget, reducing productivity growth assumptions by 0.3 percentage points. The shortfall forces consideration of tax rises or spending cuts. Jeremy Hunt criticised Chancellor Rachel Reeves, arguing Labour's tax rises shrunk the economy and rejecting blame on the OBR or past Tory tax cuts. As chancellor, Hunt had cut National Insurance costing £20 billion; Reeves later raised employers' National Insurance by £25 billion. The Chancellor now has only £9.9 billion headroom and faces an estimated £35 billion Budget black hole, constraining policy options.
Read at Business Matters
Unable to calculate read time
Collection
[
|
...
]