The British government warns of impending tax hikes mainly affecting the rich. Plans are coming out in the coming week to repair the economic havoc wrought under the brief reign of former Prime Minister Liz Truss.
Truss’ successor Rishi Sunak, who is en route to the G20 summit in Bali, has vowed to control rapidly rising inflation. But, even if that means that companies and consumers will be presented with the bill, his Treasury Secretary, Jeremy Hunt, told Sky News the pain will weigh disproportionately on the better-off. Hunt is gearing up for a strong budget statement on Thursday.
Hunt admitted that the UK economy is probably already in recession. “But we are a resilient country, and frankly, we have faced much greater challenges in our history,” he said. “I’m afraid we will all pay a little more tax.” Hunt did not go into details about cleaning up the rubble of Truss’s tax-cutting budget. Her plans caused panic in the financial markets, among other things. “We will ask for sacrifices from everyone,” emphasized the finance minister.
Hunt reportedly wants to change income tax rates so that taxes on high earners go up. He also wants to severely limit government spending in the coming years now that inflation is in double digits. He said the rise in energy prices caused by the war in Ukraine represents an economic blow of 140 billion pounds.
He also mentioned a plan to curb inflation, contain high energy prices, and find the way back to healthy growth. The United Kingdom desperately needs the latter, he says.
