UK Warns of Budget Pain to Come This Week
Britain’s government on Sunday warned of impending tax hikes, especially for the wealthy, as it bids to repair economic havoc wrought by the short-lived tenure of former prime minister Liz Truss.
Truss’s successor Rishi Sunak, who was heading to a G20 economic summit in Indonesia, has vowed to get soaring inflation under control even if it means more pain for hard-pressed consumers and businesses.
His finance minister, Jeremy Hunt, told Sky News that the pain would fall disproportionately on the better off as he prepares to unveil an emergency budget statement on Thursday.
Hunt conceded that the UK economy was already likely in recession, “but we are a resilient country and we’ve faced much bigger challenges, frankly, in our history.
“We’re all going to be paying a bit more tax, I’m afraid,” he said, while refusing to be drawn into detail on the figures, after a tax-cutting budget by Truss caused panic on financial markets.
“We will be asking everyone for sacrifices,” the chancellor of the exchequer stressed.
“But I think in a fair society, as we are in the UK, we need to recognize that there’s only so much you can ask from people on the very lowest incomes, so that will be reflected in the decisions that I take.”
Hunt is reportedly looking at changing income tax brackets, to raise more revenue from high earners, and impose strict curbs on government spending for years to come as inflation hits double digits.
He said the surge in energy prices linked to the war in Ukraine amounted to an economic hit of $166 billion.
“It’s like the economy supporting an entire second NHS [National Health Service],” the minister said.
“This will be a plan to help bring down inflation, help control high energy prices and also get our way back to growing healthily, which is what we need so much.”