Jeremy Hunt takes the tax burden to post-war high

Jeremy Hunt has just announced the most austere fiscal statement since 2010. The Chancellor’s plan to plug the £55 billion black hole in public finances will be achieved with £25 billion in tax hikes and £30 billion worth of spending cuts by 2027-8, taking the tax burden to a post-war high.

The economic forecast from the Office for Budget Responsibility suggests the UK is already in a recession, echoing the Bank of England’s predictions for a shallow yet long downturn. The OBR’s forecasts are slightly more optimistic, showing five consecutive quarters of negative growth compared with the Bank’s eight. Still, the OBR’s predictions show the UK experiencing the sharpest economic contraction in Europe next year.

Inflation is expected to remain more than triple the Bank’s target next year, averaging 7.4 per cent. As price hikes eat away at savings, wages are taking a substantial hit, too.