- ORIGINAL NEWS
IMF warns British government against more tax cuts
- SUMMARY
The International Monetary Fund (IMF) has advised the UK government against implementing further tax cuts this year.
The IMF believes that the government needs the money for public services and investments that promote economic growth.
The UK has a budget deficit, which means that it spends more money than it collects in taxes.
The IMF has recommended that the UK raise taxes on carbon emissions, property, and wealth and reform pension level rules to address this deficit.
The IMF’s forecast shows that the UK economy will grow by 0.6% in 2024, which is a slight increase from the estimated 0.5% growth in 2023.
However, it has revised its forecast for 2025 down by 0.4%.
The IMF has stated that disinflation will improve financial conditions and let real incomes recover, but reduced scope for growth due to recent upward revisions to output during the pandemic has led to the downgrade.
On a positive note, inflation in the UK is expected to average 2.8% in 2024, and the Bank of England is expected to ease interest rates, similar to the Federal Reserve and the European Central Bank.
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“The U.K. government should not introduce further tax cuts this year, the International Monetary Fund said Tuesday, as its chief economist argued the national budget needed the money for public services and growth-friendly investments.”
“British Finance Minister Jeremy Hunt will announce his latest budget in early March, in what may be the last major fiscal announcement before a General Election is held.”