06 Aug 2025, 16:10
The government may increase taxes to cover the deficit
- The government is facing a deficit of £51 billion.
- The Prime Minister does not rule out the possibility of increasing taxes.
- Experts believe that increasing taxes is necessary for the stability of the budget.
The government of Great Britain is reported to be in a difficult situation due to the projected deficit of £51 billion. Prime Minister Sir Keir Starmer emphasized the need for economic management, but did not respond clearly to the question of potential tax increases in the upcoming budget. He noted that the budget will be focused on improving living standards and increasing community welfare.
According to the publication Rachel Rives, to cover the deficit, it will be necessary to introduce "peaceful, but stable" tax increases. This would be a result of weaker economic activity and the necessity to increase state revenues. According to data from the National Institute of Economic and Social Research (NIESR), which the government has not yet taken into account, it would be forced to resort to serious financial problems.
Starmer emphasized that the economy has stabilized, but inflation is rising, while economic forecasts indicate a need for increased taxes to avoid further cuts in spending. Rives also pointed out that the criticism, since its members do not want to increase taxes on working people, could be violated.
Experts note that increasing taxes could negatively impact the economy, while any decision regarding tax increases on the wealthy or wealthy could lead to capital flight from the country. Discussions about possible changes in the tax system are gathering momentum, as the government seeks to find a balance between fulfilling its obligations and supporting economic growth.
Tags: Europe/Politics/Economy