A person walks past the Bank of England in London’s financial district, as Britain struggles with the highest inflation rate among the world’s big rich economies, London, Britain, 17 July 2023. Photographer Rachel Adams/File Photo
By Reuters
Britain’s government should refrain from making further tax cuts given the long-term strains on the country’s public finances, the chief economist of the International Monetary Fund (IMF) said on Tuesday.
Pierre-Olivier Gourinchas said Britain faced big spending demands to fund health and social care and the country’s transition to net zero while it also needed to keep debt contained.
“In that context, we would advise against further discretionary tax cuts,” Gourinchas told reporters in Johannesburg after the IMF published updated forecasts for the global economy.
British Prime Minister Rishi Sunak and his finance minister Jeremy Hunt have suggested they will cut taxes further, possibly as early as a March 6 budget statement. Sunak’s Conservative Party is trailing the opposition Labour Party in opinion polls with a national election expected to take place later this year.