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Chancellor Warns Of 'Eyewatering' Autumn Statement To Plug Fiscal Holes

UK

Doing breakfast TV rounds, Chancellor of the Exchequer Jeremy Hunt implies that the autumn statement he is set to deliver on 17 November is going to include some notable tax hikes and spending cuts to plug holes in the gov'ts fiscal outlook.

  • Hunt: "There are going to be some very difficult choices. I've used the word 'eyewatering' before, and that's the truth." Adds that it is "disappointing but not entirely unexpected" that the UK is seen to be heading towards recession.
  • In contrast to the Kwarteng mini budget, in which unexpected tax cuts rattled markets, for the autumn statement there has been notable expectations management by the gov't.
  • Speculation on revenue-raising measures includes freezes to the thresholds of the basic and higher rate of income tax, a reduction in the threshold for the additional rate of income tax, a halving of the tax-free dividend allowance, a freezing of the threshold on businesses paying VAT, and extending a freeze of the inheritance tax “nil-rate band”.
  • On the spending side of the ledger, the FT reports that Hunt is considering 'freezing day-to-day public spending in real terms for three years after 2025', which could save an estimated GBP27bn/year by 2028.
  • Hits back at predecessor Kwasi Kwarteng's criticism of forthcoming tax hikes, states: "When we produced a fiscal statement that didn’t show how we would bring debts down the markets reacted v badly. We’ve learned you can't fund spending or borrowing without showing how you will pay for it". Kwarteng's comments could be mirrored by other free marketeers in the Conservative party, risking some blowback for the upcoming autumn statement.
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Doing breakfast TV rounds, Chancellor of the Exchequer Jeremy Hunt implies that the autumn statement he is set to deliver on 17 November is going to include some notable tax hikes and spending cuts to plug holes in the gov'ts fiscal outlook.

  • Hunt: "There are going to be some very difficult choices. I've used the word 'eyewatering' before, and that's the truth." Adds that it is "disappointing but not entirely unexpected" that the UK is seen to be heading towards recession.
  • In contrast to the Kwarteng mini budget, in which unexpected tax cuts rattled markets, for the autumn statement there has been notable expectations management by the gov't.
  • Speculation on revenue-raising measures includes freezes to the thresholds of the basic and higher rate of income tax, a reduction in the threshold for the additional rate of income tax, a halving of the tax-free dividend allowance, a freezing of the threshold on businesses paying VAT, and extending a freeze of the inheritance tax “nil-rate band”.
  • On the spending side of the ledger, the FT reports that Hunt is considering 'freezing day-to-day public spending in real terms for three years after 2025', which could save an estimated GBP27bn/year by 2028.
  • Hits back at predecessor Kwasi Kwarteng's criticism of forthcoming tax hikes, states: "When we produced a fiscal statement that didn’t show how we would bring debts down the markets reacted v badly. We’ve learned you can't fund spending or borrowing without showing how you will pay for it". Kwarteng's comments could be mirrored by other free marketeers in the Conservative party, risking some blowback for the upcoming autumn statement.