Economists believe the Government’s tax giveaway could backfire unless it results in a wave of international investment flowing into the UK. 🔴 DavidParsley50
could backfire unless it results in a wave of international investment flowing into the UK.was the largest tax-cutting event in half a century, with Chancellor Kwasi Kwarteng axing the 45 per cent tax rate for those earning more that £150,000, knocking 1p of all earners’ income tax, and reversing the national insurance hike implemented by former Chancellor Rishi Sunak less than six months ago.
“If we see a strong level of investment then that should drive the growth that the Government is looking for.” Paul Johnson, director of the Institute for Fiscal Studies , added: “Mr Kwarteng is not just gambling on a new strategy, he is betting the house.” The IFS believes the tax cuts will lead to UK borrowing reaching £190bn in the current financial year. At 7.5 per cent of national income this would make it the third-highest peak in borrowing since the Second World War, after the global financial crisis and the Covid-19 pandemic.
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