Mike Graham and Michael Simmons, economics editor for The Spectator, discuss the bleak outlook for the UK economy, highlighting stagnant growth and rising unemployment.
The main issue is Britain’s high level of public spending. Simmons explains that Labour MPs are strongly opposed to cutting welfare or benefits, as shown by their reaction to past attempts to reduce winter fuel allowance or other payments. This leaves Shadow Chancellor Rachel Reeves with only one realistic option: raising taxes.
This view is echoed by groups such as the Institute of Directors, which argue that tax rises, particularly on income, are the only way to close the public spending gap.
Simmons notes that while this move is politically difficult, as income tax rises hit everyone and weaken growth, it remains the most likely route to balance the books. The Bank of England has also urged tax increases to cover spending.
Credit to : The Independent Republic of Mike Graham