By Guest Writer •
Published: 10 Jul 2022 • 12:59
Tax conundrum for new Chancellor Nadhim Zahawi
Credit: Andrew Parsons / No 10 Downing Street flickr
The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the UK Treasury to provide independent economic forecasts and independent analysis of the public finances.
In little more than two years, the UK economy and public finances have felt the consequences of a global health crisis caused by Covid-19, a global security crisis sparked by Russia’s invasion of Ukraine, and a global energy crisis brought about by both.
In a little over a decade, we have also felt the economic and fiscal consequences of a global financial crisis and the uncertainty created by the UK’s decision to leave the EU and the ensuing negotiations on how to go about it.
In a recently published report, the OBR states “Discretionary fiscal support for households, firms, and public services during the pandemic was unprecedented in scale, reaching 10.4 per cent of GDP at its peak in the UK, and may have raised expectations regarding the role of government in future crises.
“The UK Government has so far spent as much this year (1¼ per cent of GDP) to help households to cope with the sharp rise in the cost of living as it did supporting the economy through the financial crisis.
It concluded therefore that if public debt is to be not just kept under control but reduced to a target 75 per cent of GDP that there are no options other than to increase taxes and ensure that public spending falls.
Thank you for reading UK Office for Budget Responsibility calls for tax increases’ and remember that all articles produced by Euro Weekly News may be accessed free of charge.
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