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Rachel Reeves has suggested that higher taxes on the rich would be part of Budget Next month.
chancellor She acknowledged that she was considering possible tax increases and spending cuts to fill her budget shortfall, which she said was partly due to the long-term impact of Brexit.
Asked whether higher taxes on the rich would be part of his November 26 statement, he said they would be “part of the story.”
Speaking to The Guardian during his visit to Washington for the International Monetary Fund (IMF) meeting, he also said that fear was spread over his decisions last year, which hit the pockets of the rich.
“Last year, when we announced things like non-doms, like (tax increases) for private equity, like VAT on private school fees, there was so much noise that this was not going to raise money – that people would leave.
He said, “The Office for Budget Responsibility will publish updated data on all those things. And there’s no point in all that scaremongering, because it’s a wonderful country and people want to live here.”
With no rebound in economic growth, extremely high inflation and the rising cost of government debt, Ms Reeves will have to fill a black hole estimated by some economists at £50 billion.
Before leaving for the US, he told Sky News that “of course, we are looking at tax and spending”.
She confirmed that the budget watchdog has “consistently overestimated” UK productivity, with a potential decline from its previous estimates making Ms Reeves’s job even more difficult.
He said the economy is still suffering from the effects of leaving European UnionAusterity policies and Liz Truss’s mini budget.
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The National Institute of Economic and Social Research (NIESR) has suggested that Ms Reeves will need to find about £50 billion a year by 2029-39 to meet her target of balancing day-to-day spending with tax revenues, while maintaining “headroom” of about £10 billion against that target.
Asked whether she was now in an “unfortunate cycle” of continually raising taxes to plug the black hole, Ms Reeves said she wouldn’t use those words but “nobody wants this cycle to end more than me”.
He said, “Challenges are coming our way, be it geopolitical uncertainties, conflicts around the world, increased tariffs and trade barriers and now this review is looking at how productive our economy has been in the past and then taking it forward.
“But I will not ignore those challenges. Of course, we are also looking at tax and spending, but as Chancellor the numbers will always stick with me because we saw just three years ago what happens when a government, where the Conservatives lost control of the public finances – inflation and interest rates hit rock bottom.”
He said reforming the planning system would help “bring manufacturing back to Britain”.
The IMF has warned that UK inflation will reach the highest levels among the G7 group of developed democracies in 2025 and 2026.
The IMF raised its UK economic growth forecast for this year, but lowered its assessment for 2026 amid concerns over the labor market.
The IMF also said that Britain is going to be the second fastest growing G7 country this year, with only the US growing faster.
shadow chancellor sir mail stride Said: “Rachel Reeves doesn’t need to raise taxes. She needs to get a grip on government spending – including the welfare bill.
“There is no doubt, this tax doom cycle is due to the Chancellor’s economic mismanagement.
“Under Rachel Reeves we have seen inflation double, debt balloon, borrowing costs hit a 27-year high and taxes rise – with more pain to come in the autumn.”