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Budget Carries Over Windfall Tax, Sets Lofty Deficit Reduction Goals

  • The government have formally submitted their 2024 draft budget plans to parliament, with post-COVID windfall taxes set to remain in place next year – extended the initial temporary two-year period. The policy will be tweaked, however, lessening the burden on banks, pharma and energy firms by halving the tax rate. The rate remains the same for retail firms.
  • The draft budget looks for a deficit of 2.9%/GDP in 2024, with year-end debt/GDP ratio of 66.7% - a notch lower than the 69.7% seen at the end of this year. The draft bill assumes GDP growth averaging 4% over the coming years – ahead of median analyst consensus – which could harm deficit projections if not met.
  • PPI data out this morning showed PPI slipping on both the M/M and Y/Y reads: April PPI fell 2.0% from March, slowing the annual rate to 15.9% from 21.7% prior.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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