According to the most recent predictions from the Office for Budget Responsibility, the British economy will contract by 1.4% next year.
The OBR’s previous projection, issued in March, predicted a growth of 1.8% for 2023 as opposed to the current forecast.
Since then, the country has been challenged by an inflation rate of over 11%, a slowing global economy, and market instability brought on by the brief premiership of Liz Truss.
According to Finance Secretary Jeremy Hunt, the OBR forecasted that the GDP would increase by 1.3% in 2024 and 2.6% in 2025 versus the OBR’s prior predictions of 2.1% and 1.8%, respectively.
As part of his plan to restore financial stability and protect the most vulnerable British families from the recession, Jeremy Hunt increased taxes on higher earners and energy companies.
To fill a hole in the public finances estimated to cost 55 billion pounds, he has also proposed a budget that will involve freezing income tax allowances and lowering the threshold at which people will begin paying the highest rate of income tax.
Along with a slew of other measures to assist retirees and households with lower incomes, Hunt has stated that he intends to reduce the income threshold that triggers payment of the top 45% income tax rate from £150,000 to £125,140 (USD 150,000).
According to what he said, individuals who make a yearly income of £150,000 will be required to pay an additional £1,200.