The chancellor of the exchequer Jeremy Hunt announced a deterioration in the forecast of economic growth in the UK.
This news was a kind of blow to the government of the current British Prime Minister Rishi Sunak since general elections will be held next year.
During a speech in the House of Commons on Wednesday, November 22, Jeremy Hunt reported that the United Kingdom’s economy is projected to grow by 0.7% in 2024. In 2025, the indicator of positive dynamic, according to him, should be 1.4%. In this case, the chancellor of the exchequer referred to the forecasts of the Office for Budget Responsibility. The previous version of the vision of the future of the British economic system by the employees of this organization envisaged growth of 1.8% in 2024 and 2.5% in 2025.
Jeremy Hunt on Wednesday also said that the country’s leadership, to ensure the positive dynamics of the United Kingdom’s economy, is decreasing debt, reducing taxes, and rewarding work. According to him, large-scale expenditures and a high level of tax burden do not contribute to growth.
The media reports that expectations are currently circulating in the United Kingdom that Jeremy Hunt will expand the 100% tax relief on capital expenses. This measure will stimulate investment activity. There are also expectations that the chancellor of the exchequer will announce supply-side reforms, including speeding up the connection to the electricity grid and encouraging more Britons to return to work.
Jeremy Hunt announced his intention to increase social benefits following the level of inflation that was recorded in September. He also retained the triple fixation of pensions.
The chancellor of the exchequer separately announced the implementation of its budget rule on reducing the share of debt in GDP by the end of the five-year forecast with a doubled headroom, which in March was equal to 6.5 billion pounds. However, the Resolution Foundation described this headroom as a financial illusion based on commitments made for the years after the election, which are probably impossible to realize from the point of view of the political factor.
Some experts say that the plans of the chancellor of the exchequer are associated with limiting spending in the period after the expected elections of 2024 and are likely to cause deterioration in the quality of public services.
As we have reported earlier, UK Inflation Demonstrates Decrease.