It has been reported that the Government may implement tax cuts before summer recess in July after economic forecasting makes for grim reading. By 2025, the economy is forecast to be only one percent larger than it is today as we suffer from the “huge growth hole relative to where we expected to be in 2019”, according to Newsnight’s Economics Editor Ben Chu.
On top of this, the Bank of England’s GDP projection report last week shows “virtually zero growth over the next three years”.
According to a report from the Office for Budget Responsibility, the official forecaster for the Government, prior to the coronavirus pandemic it was thought the economy would be six percent bigger by 2025.
Despite the long-term policies announced in the Queen’s Speech to aid growth and with further help from the Treasury expected in August, the strain of the cost of living crisis upon families is at a tipping point.
Jagit Chadha, from the National Institute of Economic and Social Research, told Newsnight: “It is very hard to understand how families who suddenly have bills in excess of their household income can be helped by an agenda that could affect trade and level of education for five years down the line…but it will not help families this year who are facing drastic financial crisis.”
Mr Chu concluded: “The Queen’s speech correctly identifies the link between medium-term economic growth and future living standards.
“Yet, for many UK households the medium-term feels a long way off. The priority is simply getting through this year.”
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Meanwhile, David Davis told the news broadcaster he wants a “significant reduction in taxes- or preferably a reversal of the increase in national insurance”.
He continued: “And I would add to that, frankly, an abolition of VAT on fuel.”
However, no decisions have yet been made but it is thought that the amount of further support may cause issues between the Treasury and Ministers after the Treasury has already given £22billion in help this financial year.