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Uk finance minister faces pressure to implement tax cuts as economy stagnates

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UK Finance Minister Jeremy Hunt is set to unveil his Autumn Statement budget announcement on Wednesday, amidst calls from within his own Conservative Party to introduce tax cuts in the face of a stagnant economy. The cautious fiscal approach adopted by Prime Minister Rishi Sunak’s government follows the market panic triggered by the disastrous “mini-budget” delivered by his predecessor, Liz Truss, last year.

With the UK economy recording no growth in the third quarter, Hunt is expected to introduce measures aimed at strengthening the country’s weak growth prospects by attracting business investment and removing barriers to large-scale infrastructure projects.

In October, headline inflation stood at an annual rate of 4.6%, marking its lowest level in two years and a significant drop from the 11.1% rate when Hunt assumed responsibility for the nation’s finances a year earlier. However, inflation remains well above the Bank of England’s target of 2%, continuing to burden households financially.

Hunt finds himself with greater financial resources compared to last year, but is facing pressure from the right-wing faction of his party to implement tax cuts. Presently, tax levels in the UK are at their highest point since records began 70 years ago. While Hunt has not categorically ruled out tax cuts, he has stressed the fragile state of the economy and emphasized that reducing living costs is the government’s priority.

In a recent development, the UK Treasury announced last week that £4.5 billion ($5.6 billion) in funding will be allocated to British manufacturing, aimed at stimulating investment across eight sectors throughout the country. This funding will be available over a five-year period beginning in 2025.

As the UK eagerly awaits the Autumn Statement, all eyes are on Jeremy Hunt as he navigates the delicate balancing act of addressing the demand for tax cuts while also prioritizing the nation’s economic stability. The outcome of his budget announcement will undoubtedly shape the country’s economic trajectory in the coming months.

More detail via CNBC here… ( Image via CNBC )

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