Jeremy Hunt handed £20bn of headroom for tax cuts this March
11 months, 2 weeks ago

Jeremy Hunt handed £20bn of headroom for tax cuts this March

The Independent  

Sign up for the View from Westminster email for expert analysis straight to your inbox Get our free View from Westminster email Get our free View from Westminster email SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy Jeremy Hunt has been handed a boost ahead of his March Budget after government borrowing came in less than expected in December. Senior economist Cara Pacitti said: “Lower-than-expected inflation late last year has reduced debt interest costs and given the chancellor a timely fiscal boost ahead of his Budget in March.” And analysts Capital Economics said Mr Hunt could still meet his fiscal rule, that debt should be falling as a share of national income in five years’ time, with about £20bn to spare for tax cuts. Mr Hunt wrote: “Just as Nigel Lawson positioned the City of London for the finance boom in the 1980s, this period of Conservative government has seen the UK positioned for the massive technological boom we’re set to see in the coming years.” It is thought that Mr Hunt will opt for personal tax cuts, through either national insurance or income tax, to please voters ahead of an election expected this autumn, as the Tories lag Labour in the polls. Interactive Investor’s head of investment Victoria Scholar said: “The reduction in December’s borrowing is a win for the government, providing some fiscal wiggle room to cut taxes in a crucially important year for the Conservatives.” “The fall in inflation acts as a tailwind to the public purse by reducing the government’s debt interest costs which jumped on the back of rising inflation and interest rates,” she added.

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