The chances of tax rises in the autumn budget to help fund Labour’s spending plans are greater than 50/50, according to one of the UK’s most respected independent economists.
Paul Johnson, director of the Institute for Fiscal Studies, said the likelihood of tax increases would depend on the strength of the economy.
Paul Johnson said tax hikes are more likely than not
PA / GB NEWS
His comments come as the Labour government prepares to unveil £300 billion worth of spending in its three-year spending review.
Speaking on this week’s Chopper’s Political Podcast, he said: “There’s a decent chance, I’m afraid, that the forecast for the economy—and therefore for borrowing—will be worse than it was in the spring, partly because the Office for Budget Responsibility was remarkably optimistic at the time, and partly because some things have deteriorated.”
He added:“President Trump’s tariffs and the uncertainty surrounding them have slowed global economic growth. That’s affected UK government debt interest rates—expected rates are now higher. So that’s going to squeeze the Chancellor’s headroom. And she left herself with almost none. So I think there is, I’m afraid, probably a better-than-50/50 chance that we’ll see more tax rises in the autumn.”
Listen to the full interview with Paul Johnson on Chopper’s Political Podcast this Friday.