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Rachel Reeves may have to face Bigger than expected black hole in the country’s financial condition She prepares for the next month Budget Amid reports that the fiscal watchdog is about to slash the UK’s productivity performance.
BBC reported on Tuesday that Office for Budget Responsibility (OBR) is expected Downgrade UK’s performance in terms of productivityWith the fear that it might represent Another £20 billion gap in public finances,
after this it happened Disclosures by Independent on September The Chancellor was bracing herself for bad news on productivity, which hit economic growth.
The OBR is set to deliver its final draft forecast in the coming days, less than a month before the Chancellor’s Budget on 26 November.
But Ms Reeves has doubled down on blaming Brexit for the country’s economic problems as she was briefed on the latest news on a visit to Saudi Arabia this morning.
“There are clearly big benefits from rebuilding some of those relationships, but inflation is also very high,” he said at the Future Investment Initiative in Riyadh.
“One reason for this is that there are very high costs associated with trading with our nearest neighbors and trading partners.”
The Chancellor faces the prospects of tax rises or spending cuts to plug the existing £40bn gap, as well as an additional £10bn of headroom to help the country deal with any further economic shocks.
There is growing speculation about what measures Ms Reeves might introduce in the Budget, with changes to income tax and wealth tax believed to be among the ideas on the table, but treasure What is under consideration will not be considered.
A treasure The spokesperson said: “We will not comment on speculation ahead of the OBR’s forecast, which will be published on 26 November.”
on monday, Ms Reeves indicated tax increases are being considered ahead of the budgetBecause the government needs to ensure that there is “sufficient scope” for its spending plans, and that its financial rules are met.
Speaking during a visit to Saudi Arabia on Monday, the Chancellor did not rule out the possibility of tax rises when asked if they were being considered as part of the budget.
“The foundation of economic growth is stability and I’m not going to break the fiscal rules we’ve set,” she said.
He said: “As we get that primary deficit down, we start to see a decline in debt as a share of GDP, because we need more sustainable public finances, especially in the uncertain world we live in today.
“So growth will be a big part of that budget story, in a way, frankly, I think growth has been neglected as a tool of fiscal policy over the last few years.
“But we are, of course, paying attention to tax and spending to make sure that we both maintain resilience against future shocks, by making sure that we have enough headroom, and also making sure that those fiscal rules are followed.”
A senior source told Independent At that time in September “the OBR will make it clear that this amendment has nothing to do with any measures brought forward by this government”.
The tax rise is expected to be announced during the fiscal event late next month, as the Chancellor looks to balance the books.
One solution that is being considered is Mansion tax on properties worth more than £2m, But Ms Reeves warned such a levy would not be enough to bridge the gap.
Paul Johnson, former director of the Institute for Fiscal Studies, told Independent The government should comprehensively reform property taxes so that council tax is proportional to the current value of a property, as well as abolishing stamp duty.