Jeremy Hunt, the Chancellor of the Exchequer, has stated that cutting taxes at this time is "virtually impossible," despite government borrowing being lower than expected. In his November Autumn Statement, Hunt put a damper on hopes of a tax giveaway, even though borrowing was £11.6 billion, below the predicted £13 billion. The government's increased tax revenue and the knock-on effects of falling inflation have provided a boost, but Hunt believes that the cost of long-term debt is still too high. He emphasized the need to stick to the plan of reducing inflation and interest rates in order to bring down those costs.
Better Borrowing Figures
The government's borrowing for the financial year has reached £69.6 billion, which is below the official forecasters' figure of £81 billion. While this suggests some room for maneuver, Ashley Webb of Capital Economics predicts that any tax cuts or increased spending will likely be limited. Webb believes that there may be small opportunities for adjustments in next March's Budget, but overall, the Chancellor is unlikely to significantly deviate from the current plan.
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