The UK economic outlook is bleak, think tanks warn, with tough choices for the next government
Leading British economic think tanks are warning that whoever wins the country’s general election this year will face some very tough choices on tax and spending if they want to make sure the public finances don’t deteriorate further
LONDON — Leading British economic think tanks warned Thursday that whoever wins the general election expected this year will face some very tough choices on tax and spending if they want to make sure the public finances don't deteriorate further.
After number-crunching Wednesday's budget statement from Treasury chief Jeremy Hunt, which reduced a tax paid by employees on their earnings for a second time in four months, both the Institute for Fiscal Studies and the Resolution Foundation said the economic inheritance facing the next government will arguably be one of the bleakest any has faced since World War II.
They said the combination of high interest payments on debt and muted economic growth mean that both the governing Conservative Party and the main opposition Labour Party will struggle to deliver on their ambitions.
A general election must take place by Jan. 2025, but it could come as soon as May. With opinion polls showing that his Conservative Party, in power since 2010, is heading for one of its biggest ever defeats, the prevailing view is that Prime Minister Rishi Sunak will opt to go to the country in the fall, potentially at the same time as the U.S. presidential election.
On Thursday, following the budget statement, Labour leader Keir Starmer once again challenged Sunak to call an election for May, while the prime minister brushed aside any questions about its timing.
“The task for whoever wins is huge,” said Torsten Bell, chief executive of the Resolution Foundation. «They
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