Chancellor Jeremy Hunt Urged to Implement Sweeping Tax Cut in Next Month's Budget
Jeremy Hunt, the Chancellor of the Exchequer, is facing pressure from his own MPs to implement tax cuts after it was revealed that the UK experienced a mild recession last year. In an effort to stimulate economic growth, Hunt is being urged to introduce significant tax reductions in the upcoming Budget.
However, the Prime Minister's office and the Treasury have encountered a setback, as the fiscal watchdog has halved their available funds for such measures. This leaves approximately £13 billion for potential tax cuts, with plans to reduce national insurance or income tax currently off the table.
Former Business Secretary Jacob Rees-Mogg stated, "The economy clearly needs a boost and this should come in the form of lower interest rates and tax cuts." Similarly, former Cabinet Minister John Redwood emphasized the need for the government to take more action, pointing out that the forecasts indicate affordability for tax reductions.
UK Enters Technical Recession as Economic Output Drops
In addition to the calls for tax cuts, it has been revealed that the UK entered a technical recession, characterized by two consecutive quarters of negative economic growth. From October to December, the country's total economic output declined by 0.3%, following a 0.1% decrease in the previous quarter.
Despite these figures, Jeremy Hunt remains optimistic, stating that there is "light at the end of the tunnel." He emphasized the need for responsible tax cuts, expressing caution about actions that could fuel inflation, especially when progress is being made in reducing it.
Shadow Chancellor Rachel Reeves criticized the Prime Minister's economic plans, stating that the statistics demonstrate the failure to promote growth. However, economist Ruth Gregory characterized the recession as "as mild as they come."
