Threat of tax rises ebbs after fast economic recovery

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The Office for Budget Responsibility (OBR) said the faster than expected economic recovery has driven up tax receipts.This has partly reduced the need for the Government to spend to support the economy, causing the reduction in borrowing.

The OBR also pinpointed a leap in stamp duty for the Government, with £1.2billion in receipts for June ‑ up £556million on the previous month.The coffers swelled as buyers rushed to complete house purchases before the end of the full tax break on June 30.

The data shows borrowing ‑ the difference between spending and tax income ‑ so far this financial year has reached £69.5billion.That is £49.8billion less than the same period a year ago.

Julian Jessop, Economics Fellow at free-market think tank the Institute of Economic Affairs, said: “This relative improvement may only be temporary and fiscal discipline is therefore as important as ever.

“However, there is no immediate need for further austerity of any kind ‑ whether in the form of deep spending cuts or tax increases ‑ to repair the damage done by Covid.”

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