Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

UK's Hunt says won't implement tax cuts that fuel inflation

Published Nov 19, 2023 03:55AM ET Updated Nov 19, 2023 06:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: FILE PHOTO: British Chancellor of the Exchequer Jeremy Hunt leaves Downing Street in London, Britain, September 13, 2023. REUTERS/Toby Melville/File Photo

By Kylie MacLellan and Andy Bruce

LONDON (Reuters) -British finance minister Jeremy Hunt said on Sunday he would not implement tax cuts that would push up inflation, days before he announces a major budget update that is widely expected to contain reductions in some taxes.

Hunt is due to present an Autumn Statement on Wednesday which he hopes will revive the fortunes of both a stagnant British economy and the governing Conservatives ahead of an election expected next year, and the Sunday Times reported he was considering cutting income tax or national insurance.

He has been under pressure from some Conservative lawmakers who, alarmed at the opposition Labour Party's big lead in opinion polls, have demanded he deliver tax cuts.

"We do want to bring down the tax burden but we will only do so responsibly," Hunt told Sky News. "The one thing we won't do is any kind of tax cut that fuels inflation."

Annual inflation tumbled to 4.6% in October from 6.7% a month earlier, putting Prime Minister Rishi Sunak on track to meet a pledge of halving inflation over 2023.

"I do think the British economy has turned a corner this week," Hunt said in a separate interview with Times Radio, adding that his priority was growth. "I will be doing everything that I can possibly think of to boost growth."

Asked if he would cut inheritance tax - a move the Sunday Times said could be delayed owing to bad press - Hunt told Sky "everything is on the table" ahead of his statement.

OPTIONS LIMITED AFTER HEAVY SPENDING

Labour's finance spokesperson Rachel Reeves said cutting inheritance tax would be the wrong priority in a cost-of-living crisis.

"Lower taxes on working people - if the government can explain where the money is coming from - is something I would support," Reeves told Sky News.

Hunt's options are limited after heavy state spending on the COVID-19 pandemic and last year's surge in energy prices. Public debt now stands close to 100% of economic output, more than three times its size 20 years ago.

Still, official forecasts due on Wednesday are expected to show Hunt has more room for giveaways before running into trouble with fiscal rules than in his annual budget published in March.

"If we're going to be a dynamic, thriving, energetic, fizzing economy, we need to have a lower tax burden," Hunt told Times Radio, adding that the only way to bring personal taxes down was to spend public money more efficiently.

"We want to show people there is a path to lower taxes but we also want to be honest with people this is not going to happen overnight."

While UK tax revenues are at their highest since the 1940s, according to the Institute for Fiscal Studies, the country's tax rate is lower than in most other western European countries. Data for 2021 from the Organisation for Economic Co-operation and Development showed Britain was the lowest among major European countries, well below France's 45% or Germany's 40%.

UK's Hunt says won't implement tax cuts that fuel inflation
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Mark Gesswein
Mark Gesswein Nov 19, 2023 6:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tax cuts don’t fuel inflation. They don’t increase the money supply. In fact, I would argue that tax cuts REDUCE inflation, by reducing business costs to companies, who pass those savings onto consumers. The consumer also benefits from having less of their hard earned money confiscated through taxes. Lower taxes spur economic growth, not inflation.
Mark Gesswein
Mark Gesswein Nov 19, 2023 6:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tax cuts don’t fuel inflation. Only Central banks can do that, by printing money into existence out of nowhere.
Ali Attas
Ali Attas Nov 19, 2023 4:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Come on! Just print the money!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email