New tax hikes and red tape risk ‘derailing the recovery’
11 October 2024
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Labour Market
Economic Theory
9 October 2024
Commenting on data showing that the UK economy grew by 0.2% in August, Julian Jessop, Economics Fellow at the free market think tank, the Institute of Economic Affairs, said:
“The return to growth in August adds to evidence that the UK economy still has plenty of positive momentum. But the Government’s gloomy messaging and uncertainties over the direction of policy in many areas continue to cast a long shadow.
“The pace of growth has slowed from the unsustainable rates in the first of the year, but the latest surveys also suggest that the recovery is now more broadly based. Moreover, the UK economy has continued to perform relatively well compared both to expectations and to its peers, especially in the euro area.
“Nonetheless, worries about the tax burden and the Government’s other plans on everything from energy policy to employment rights are dampening business and consumer confidence and delaying investment and recruitment. The prospect of another surge in government borrowing is now starting to spook Investors in the bond market too.
“The Chancellor will therefore still have to tread very carefully to ensure that the Budget does not derail the recovery.”
ENDS
Notes to Editors
Contact: media@iea.org.uk / 07763 365520
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
“The return to growth in August adds to evidence that the UK economy still has plenty of positive momentum. But the Government’s gloomy messaging and uncertainties over the direction of policy in many areas continue to cast a long shadow.
“The pace of growth has slowed from the unsustainable rates in the first of the year, but the latest surveys also suggest that the recovery is now more broadly based. Moreover, the UK economy has continued to perform relatively well compared both to expectations and to its peers, especially in the euro area.
“Nonetheless, worries about the tax burden and the Government’s other plans on everything from energy policy to employment rights are dampening business and consumer confidence and delaying investment and recruitment. The prospect of another surge in government borrowing is now starting to spook Investors in the bond market too.
“The Chancellor will therefore still have to tread very carefully to ensure that the Budget does not derail the recovery.”
ENDS
Notes to Editors
Contact: media@iea.org.uk / 07763 365520
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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