You are here: Home - Saving & Banking - News -

Brits face another 6 years of austerity pain

Written by:
Britain's painful run with austerity could last as long as 2018 warns the Institute of Fiscal Studies, with VAT creeping up to 25% to help boost public finances.

The IFS warned that there will be more pain as debt levels fail to go down, and that the Chancellor will have to abandon his fiscal target to reduce debt by 2015-16.

The Institute also predicts that there will be further spending cuts or tax increases for the next parliament in order to continue to meet Osborne’s other fiscal target.

The report is an adjustment on the Office for Budget Responsibility’s March 2012 forecasts for the economy and public finances.

The IFS report took into consideration the now weaker outlook for the UK economy and lower than expected tax revenues in the past 7 months.

Carl Emmerson, deputy director of the Institute for Fiscal Studies, said: “Since the Budget, the outlook for the UK economy has deteriorated and Government receipts have disappointed by even more than this year’s weak growth would normally suggest.

“As a result, the Chancellor might find himself having to abandon one of his fiscal targets.

“If much of the additional weakness this year feeds into a permanently higher outlook for borrowing, then in order to comply with his other fiscal target Mr Osborne would need to announce yet more tax rises or spending cuts for the next parliament in next week’s Autumn Statement.

“In that case the planned era of austerity could run for eight years – from 2010-11 to 2017-18.”

Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Retirees do £27bn worth of unpaid work

Nearly £27bn worth of unpaid work is carried out by the ‘Retired Nation' despite the older generation feeling that they...