UK self-billed ‘Scrooge’ promises tax increases and spending cuts
LONDON, Nov 13, (AP): Britain’s Treasury chief warned Sunday of a coming spending crunch and tax increases for cash-strapped Britons as he bids to fill the “black hole” in the country’s finances.
Billing himself as a Scrooge figure ahead of Thursday’s Autumn Statement, when he will update Parliament on the government’s budget measures, Jeremy Hunt said he was forced to make “very difficult decisions” in his attempt to curb inflation and put the economy back on an even keel.
He told British broadcasters that he was determined to make an expected recession as shallow as possible, and warned that everyone could expect to pay more tax.
Explicit
“I’m a Conservative chancellor and I think I’ve been completely explicit that taxes are going to go up, and that’s a very difficult thing for me to do because I came into politics to do the exact opposite,” he told the BBC, using his official title, Chancellor of the Exchequer.
Hunt is seeking to make up to 60 billion pounds ($71 billion) in savings and extra revenue in a bid to tighten up public finances and undo some of the damage economists say was done by his predecessor, Kwasi Kwarteng, and former prime minister Liz Truss.
According to the Resolution Foundation, a think tank, Truss and Kwarteng blew 20 billion pounds on unfunded cuts to national insurance and stamp duty, with a further 10 billion lost to higher interest rates and Government borrowing costs.
Hunt said he would continue his predecessor’s pledge to help Britons with soaring energy bills, but added government departments could expect to see cuts.
Earlier he told The Sunday Times in an interview “I’m Scrooge who’s going to do things that make sure Christmas is never canceled.”
BERLIN: Also:
The German government’s panel of independent economic advisers forecast Wednesday that Europe’s biggest economy will shrink by 0.2% next year.
The five-member panel’s report came after official figures late last month showed unexpected growth in the third quarter, thanks to private spending.
But a weak winter, with gross domestic product declining in the last months of the year and in the first three months of next year, is still widely expected. Two consecutive quarters of negative growth is one technical definition of recession, but the 19-country euro area has a body that also uses a broader set of data including employment numbers and depth of the economic decline to determine when a recession occurs.
The advisers’ forecast of 1.7% growth this year and a decline of 0.2% in 2023 contrasts with a forecast at the end of March that German GDP would expand by 1.8% this year and 3.6% next year.
It’s still more optimistic than a forecast by the government itself a month ago, which foresaw growth of 1.4% this year and a decline of 0.4% next year.
Inflation has increased to 10.4% in October as energy prices remain high, and the problem isn’t expected to go away soon. Wednesday’s report predicted an average annual inflation rate next year of 7.4%, a little below this year’s 8%.