Devendra Kumar
In a highly anticipated autumn statement, UK Chancellor Jeremy Hunt outlined a package of measures aimed at boosting growth, cutting taxes, and reducing inflation. The statement comes ahead of a general election expected next year and is designed to appeal to voters. According to the Office for Budget Responsibility (OBR), the UK’s growth forecast for gross domestic product (GDP) has been upgraded this year, but downgraded for subsequent years.
The OBR had previously forecast a contraction in the economy this year, but has now revised it up to 0.6 per cent growth. However, growth is expected to slow down in subsequent years, with 2024 forecast at 0.7 per cent, 2025 at 1.4 per cent, and 2026 at 1.9 per cent. The OBR expects growth to pick up again in 2027 and 2028.
Hunt announced a 6.7 per cent increase in universal credit and other benefits, in line with September’s inflation figure. He also confirmed that the triple-lock formula for state pension rises would be implemented, resulting in a 8.5 per cent increase, worth up to £900 more a year.
In his speech, Hunt claimed that the government’s plan for the economy is working, citing the growth of the economy and the rise in real incomes. However, he also acknowledged that the work is not yet done and that there is still more to be done to address challenges facing the economy.
In other announcements, Hunt promised £7 million over three years to tackle antisemitism, committed to exploring options for a NatWest retail share offer, and froze alcohol duties until August 2024. He also extended 75 per cent business rates relief for retail, hospitality, and leisure until 2025 and cut national insurance by an average £350 a year for around two million self-employed people.
Hunt’s statement is likely to be seen as a response to criticism that the government has not done enough to support the economy and address the cost-of-living crisis. By promising measures to reduce taxes and increase benefits, Hunt is attempting to appeal to voters who may be feeling financially squeezed. However, the OBR’s downgraded growth forecasts for subsequent years may raise concerns that the government’s plans may not be enough to drive sustained economic growth.