Chancellor Jeremy Hunt is set to lay out a package of sweeping spending cuts and tax hikes in a plan he promises will shore up Britain’s defences against an economic “storm”.
He will tell MPs on Thursday that his £54bn statement will put the UK on a “balanced path to stability” as he tackles the “enemy” of inflation, which has soared to a 41-year high.
Mr Hunt will say his “difficult decisions” are necessary to keep mortgage rates low and tackle the sky-high energy and food prices intensifying the cost of living crisis.
It comes after Bank of England governor Andrew Bailey said that the UK economy has suffered a “dramatically” worse recovery from Covid than the US and EU.
Speaking at a hearing of the Treasury Select Committee, Mr Bailey told MPs there was a “striking” difference between the economic performance of GDP post-pandemic and that of the US dollar and euro.
He said Britain’s economy was 0.7 per cent smaller than at the end of 2019, while the eurozone was 2.1 per cent higher and the US 4.2 per cent larger than their pre-pandemic levels.
Watch: Martin Lewis shares ‘Christmas shopping quickies’ and offers savings hacks for festive season
Rishi Sunak pledges to release tax returns within first year as PM
Rishi Sunak has promised that he will within the coming year become the first prime minister since 2016 to publish his tax returns in full.
Mr Sunak initially made the pledge during his unsuccessful Conservative leadership campaign against Liz Truss in the summer.
But he has not yet made the figures public, sparking a warning from Liberal Democrat chief whip Wendy Chamberlain that failure to make good on the promise would risk doing even more damage to public trust in the Conservative Party.”
Our political editor Andrew Woodcock reports:
10 areas in UK where house prices are predicted to fall the most
UK house prices are widely predicted to take a tumble in the face of spiralling mortgage rates and rising rental prices, but new research shows the fall is likely to be sharper in some areas more than others.
With a deep, long recession on the horizon, the impact of stalled demand for sky-high mortgage approvals, following the disastrous Liz Truss-Kwasi Kwarteng mini-Budget in September, is beginning to put pressure on buyer demand in the property market.
New figures from house seller advice service PropCast shows demand has fallen sharply in 10 UK counties, which could pave the way for a more dramatic slump in house prices in these regions.
Jeremy Hunt vows tax hikes and spending cuts needed to ‘face economic storm’
Chancellor Jeremy Hunt will promise a plan to weather an economic “storm” as he risks a backlash by unveiling a £54 billion package of tax hikes and spending cuts.
He will insist to MPs on Thursday that his autumn statement puts the UK on a “balanced path to stability” as he tackles the “enemy” of inflation, which has soared to a 41-year high.
Mr Hunt will say his “difficult decisions” are necessary to keep mortgage rates low and tackle the rocketing energy and food prices intensifying the cost-of-living crisis.
Watch: Andrew Bailey says that UK economic recovery is dramatically behind US and EU
Brexit has added 6% inflation to food prices, says Bank of England official
Dr Swati Dhingra also said British workers had taken a 2 per cent real terms cut in their wages due to the UK’s departure from the EU, as members of the bank’s Monetary Policy Committee (MPC) appeared before parliament’s Treasury Committee.
Living standards are under immense pressure around the globe this year due to record inflation, particularly in food and energy prices, but Dr Dhingra said Britain would suffer more as a direct result of having left the EU.
Liam James has more:
Tory MPs call on Jeremy Hunt to cut fuel tax in autumn Budget
Among the MPs calling for the “critical” intervention to be included in the long-awaited fiscal statement, is former home secretary Priti Patel, 1922 Committee chair Sir Graham Brady and former Northern Ireland secretary Brandon Lewis.
Led by former education minister Jonathan Gullis, the letter opens: “My fellow MPs and I want to see fuel duty cut to stimulate growth, but at least frozen at the current level for the lifetime of this parliament.”
Thomas Kingsley reports:
John Rentoul: First shot fired in the Conservative rebellion against tax rises
Nothing much seemed to happen at Prime Minister’s Question time. The exchanges between Angela Rayner and Dominic Raab, deputising for Rishi Sunak who is on an overnight flight back from Indonesia, were surprisingly flat. It was only later that a backbench Conservative let off a firecracker, writes John Rentoul.
What can we expect from the Autumn Budget?
Chancellor Jeremy Hunt will deliver his Autumn Budget to Parliament on Thursday 17 November, finally offering clarity on how Rishi Sunak’s government plans to restore order to Britain’s public finances.
Having succeeded Kwasi Kwarteng on 14 October following the debacle of the latter’s ill-conceived and ill-timed “mini-Budget” of 23 September – which tanked the pound and brought a swift end to the premiership of Liz Truss – Mr Hunt postponed a statement originally intended for Halloween to buy himself more time.
He is now widely expected to unveil a package of tax rises worth £25bn and spending cuts of £35bn in order to plug a £60bn funding black hole in Treasury coffers and reassure global markets that Britain remains a trusted trading partner.
Joe Sommerlad reports:
Recession ‘could be longer or shorter than current Bank of England forecast’
A member of the Bank of England’s rate-setting body has said the record-breaking recession that the UK is thought to be entering could be longer or shorter than the Bank predicted earlier this month.
The Bank has forecast that the country could already be at the start of an eight-quarter recession, the longest since reliable records began in the 1920s.
“The last two or three quarters of that projected decline in GDP (gross domestic product) are pretty small, so it wouldn’t take much of a tilt to shave a couple of quarters off the projected length of the recession,” Monetary Policy Committee member Ben Broadbent said.
“So, I would not stand squarely behind the length and say this will definitely happen, it could easily turn out to be a little bit shorter or a little bit longer,” he said.
