Brits are bracing for tax hikes in autumn Budget after slowdown in economic growth
STICKY SITUATION Brits are bracing for tax hikes in autumn Budget after slowdown in economic growth
BRITS are bracing for tax hikes in the autumn after economic growth slowed in the spring, experts warned.
Rachel Reeves yesterday hailed the 0.3 per cent GDP increase from April to June after exceeding gloomy expectations.
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Tory Shadow Chancellor Mel Stride accused Rachel Reeves of 'economic vandalism'
Credit: Alamy
She said: 'Today's economic figures are positive with a strong start to the year and continued growth in the second quarter.'
But she added the economy 'has felt stuck for too long' and there is 'more to do' for working people.
Experts said it is not enough to plug a growing black hole in the public finances that could be as big as £50billion.
Growth was driven by the Chancellor pouring billions into the public sector, while the private sector reeled from National Insurance increases.
The National Institute of Economic and Social Research said Ms Reeves' 'wafer thin' £9.9billion headroom last year has been wiped out, leaving a £41.2billion deficit.
It warned she must find £51billion a year in extra taxes or cuts by 2029.
The think tank's Fergus Jimenez-England said: 'Growth was higher than forecast.
'Despite this, we expect growth to remain subdued in the third quarter as uncertainty over fiscal policy and international trade continues to weigh on economic activity.
'The Chancellor must build a substantial fiscal buffer in the autumn Budget to avoid uncertainty plaguing growth.'
It sparked fears of an inheritance tax raid, a fresh rise in capital gains tax rate and further 'stealth' and 'sin' taxes.
Understanding GDP and Its Impact on the Economy
Tory Chancellor Mel Stride said: 'With leaders saying all indicators are flashing red — and key economists warning Rachel Reeves has created a £50billion black hole in public finances — the Chancellor's economic vandalism is clear.'
Deutsche Bank's Sanjay Raja said government spending pushed up growth, as household spending 'nearly stalled'.
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