The WINNER of the NEXT GENERAL ELECTION will have to RAISE TAXES to MAINTAIN the CURRENT PROVISION for PUBLIC SERVICES due to limited fiscal headroom for any further tax cuts amid slow economic growth and easing inflation.
Stephen Millard, deputy director for macroeconomic modelling and forecasting at NIESR, said: Despite the welcome fall in inflation, UK growth remains anaemic. This will make it difficult for any incoming government to carry out the much-needed investment in infrastructure and the green transition, as well as increase spending on public services and defence, without either raising taxes or rewriting the fiscal rules.
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