The UK government is set to tighten the public finances by about 50 billion pounds, equivalent to 2% of GDP. Yet the case for such a large package is based on dubious logic, writes pierrebri
British Prime Minister Rishi Sunak holds a press conference after meeting with U.S. President Joe Biden and a phone call to Ukraine President Volodymyr Zelenskiy on November 16, 2022 in Nusa Dua, Indonesia. Leon Neal/Pool via REUTERS
at the end of June. That’s 15.5 percentage points more than the European Union average, but still less than similar economies such as France, Italy and Spain.Sunak also needs to repair the damage caused by his predecessor’s happy-go-lucky approach to public finances. Though interest rates are rising around the globe, about half of the increase in Britain’s borrowing costs since August is self-inflicted, the Resolution Foundation.
Finally, the plan’s impact hinges on the balance between lower spending and higher taxes. Though Sunak’s Conservative party dislikes taxes, raising them makes more economic sense. The United Kingdom’s tax burden is currently 37% of GDP, against 46% for the EU. Moreover, cutting public investment or services like health and education would translate into lower growth over the medium term.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Breakingviews - Breakingviews: The shafts of light in a dark, dark worldWhen John Major was Britain’s prime minister, he asked Boris Yeltsin how the Russian economy was doing “in one word”. Yeltsin, then Russia’s president, replied: “good”. Major asked him to elaborate in two words. “Not good”, Yeltsin quipped.
Read more »
Black Adam Congratulates Marvel Studios On Black Panther SuccessBlack Adam himself Dwayne Johnson congratulated Marvel Studios on their Box Office win with Black Panther: Wakanda Forever.
Read more »
Black Adam's Dwayne Johnson Celebrates Black Panther 2's Massive DebutBlackPantherWakandaForever had a record-breaking opening weekend - and BlackAdamMovie's Dwayne Johnson is nothing but happy for his MCU counterparts 👀 'That’s a lot of happy movie goers around the world. Beautiful!!! Can’t wait to see the movie.' 👏
Read more »
Breakingviews - Roche reminds investors big drug bets have risksShareholders in Swiss drug giant Roche are learning the downside of making big bets on new drugs. On Monday, the $266 billion Basel-based pharma giant revealed disappointing test results for its new dementia treatment. The drug, known as Gantenerumab, was not shown to preserve abilities such as remembering, solving problems, orientation and personal care in patients suffering from early stages of Alzheimer’s disease. Rival Biogen had scored a hit with a similar drug in September.
Read more »
Breakingviews - Crypto readies itself for a post-FTX hose-down: podcastThe collapse of Sam Bankman-Fried’s empire exposed the vulnerabilities of a vast, unregulated world of digital finance. Rivals like Circle CEO Jeremy Allaire hope to prove there’s a safer side of crypto worth saving. He presents his case in this episode of The Exchange podcast.
Read more »
Breakingviews - Intesa’s payments exit sends awkward messageCarlo Messina has picked a puzzling moment to get out of Nexi . Italy’s biggest bank by market capitalisation, a key industrial partner to the 11 billion euro payments group, sold its entire 5% stake at 8.7 euros a share late on Monday, or 584 million euros. That’s below the 653 million euros Intesa Sanpaolo paid in 2020 for a stake in Nexi, although the fact the bank revalued the shares every quarter means it is unlikely to book a loss.
Read more »