UK enters “recession” and raises taxes on the rich and energy companies

Tax lurch in the United Kingdom. After the tax cut that Liz Truss announced and that days later she annulled, andhe new British Chancellor of the Exchequer, jeremy hunt announced this Thursday a fiscal plan of up to 55 billion pounds a year of tax increases and spending cuts.

Hunt has confirmed that UK is in “recession” and he has explained that his fiscal plan for the country has three priorities: “Growth, stability and defense of public services.” The objective is to banish the fiscal plans of the previous Truss Government with this announcement, already known as the Autumn Statement.

The Executive of Rishi Sunak has given the green light to a Tax increase for citizens who earn more than 143,240 euros per year as well as at energy companies. This is a “substantial increase in taxes” with the aim of raising the tax burden by 1% of GDP over the next five years.

[Los grandes inversores se refugian en Alemania tras huir del Reino Unido asustados por la crisis política]

More tax rich and energetic

The United Kingdom will reduce from 150,000 (171,000 euros) to 125,140 pounds (143,240 euros) the income threshold from which the highest band of income tax will be paid, from Four. Five%. On the other hand, it will freeze the minimum tax-free annual earnings for two years, until April 2028.

Jeremy Hunt has also announced that will rise from 25 at 35% temporary tax on extraordinary company profits dedicated to oil and gas until 2028 and will impose a provisional rate of 45% on those surpluses to power generators.

Another measure will be electric cars Already will not be exempt from the excise tax on vehicles and buyers will start paying for it progressively from 2025.

In addition, the Aid to reduce the energy bill for companies and homes they will be limited until April 2023, a measure that he already announced several weeks ago after eliminating the Truss economic plan. In fact, Hunt also annulled the reduction from 20 to 19% of the basic band of income tax to reduce public debt and send a message of calm to the markets.

UK in recession

Before the House of Commons, Jeremy Hunt has announced that the United Kingdom has entered a “recession” and that the Inflation will be at 9.1% this year. As noted by the Finance Minister, inflation is expected to stand at 7.4% in 2023. In October, UK inflation stood at 11.1%, the highest level in 41 years.

Among the forecasts made by the Government of Rishi Sunak, the GDP of the United Kingdom will grow by 4.2% in 2022, will fall by 1.4% in 2023 and it will rise 1.3% in 2024, 2.6% in 2025 and 2.7% in 2026.

UK will go into debt this fiscal year (from April to April) by 177,000 million pounds (201,780 million euros), which is equivalent to 7% of UK GDPwhile in 2024 it expects to do so at 140,000 million pounds (159,600 million euros) -5.5% of GDP-.

The accumulated debt of the United Kingdom will begin to decrease from 97.6% in the fiscal year 2025-26 to 97.3% in 2027-2028.