High lending costs increase by warning
The cost of high borrowing for the government may mean an increase in tax or deduction may be cut. If it wants to stick to its own rules, a major economic think tank has been warned.
According to a report by the Resolution Foundation, the government is paying more £ 7BN a year on its loan than the time of the budget.
As a result, the think tank stated that high taxes or deductions may be “needed” if the government does not want to make a promise not to spend more day-to-day than bringing through tax.
A spokesperson of the Treasury said that his commitment to the BBC for his fiscal rules is “non-perfect”.
Report has come after Chancellor Rachel Reeves Its plan to promote the economy through a series of infrastructure projectsWith a third runway in Heathro.
After the last autumn of the budget, the cost of government borrowings started increasing.
The Resolution Foundation stated that the growth “is mainly inspired by international factors”, the US and European government’s debt has also increased.
Other economists have stated that the cost of high borrowings is a reaction to the least partially sluggish growth in the UK economy.
The growth has been very low after the 2022 mini-budget, and the level of borrowing has fallen since killing their highest level in many years earlier this month.
However, the Resolution Foundation said that the government’s risk of breaking its own fiscal rules “remains on the edge of the knife” as the cost of borrowing is higher than in the autumn.
Research Director of Resolution Foundation, James Smith said that Chancellor Rachel Raves would need to fulfill the fiscal rules or put forward the market gitlers.
“While Chancellor is focusing on meeting his long -term strategy for economic development, hard short -term decisions, including fresh tax growth or spending cuts, may also be required in the coming weeks, which may be required, which permanent public finance To display his commitment to. “He said.
The government has already said that it wants to cut “waste” and said that tax growth may be a possibility.
Reeves said that in December, departments would be asked to identify 5% “efficiency savings” as part of a review to determine their budget for years to come.
The Treasury spokesman told the BBC, “Chancellor has already shown that a tough decision will be taken, the waste will have to be stopped with a review of the expenditure.”
Meanwhile, Prime Minister Sir Kire Stmper did not deny more tax growth when asked by the BBC in December.
“If you look at Covid and Ukraine, everyone knows that there are things that we can no longer see, but I can tell you that our intention was to do hard goods in that budget, will not come back,” He said.
