20 Oct 2023
The Institute for Fiscal Studies (IFS) has warned that Chancellor Jeremy Hunt is in a 'fiscal bind' ahead of the Autumn Statement on 22 November.
In its Green Budget document, the business group said that low growth and high debt interest payments 'limit any room for manoeuvre' in the Statement.
It also warned that 'now is not the time for tax cuts', stating that high inflation combined with rising interest rates mean that cuts 'would be extremely difficult to justify'.
The IFS recommended the Chancellor avoid 'paying for' near-term tax cuts by penciling in an extension of the freeze to the personal tax allowance or by tightening or extending the squeeze on public service spending beyond March 2025.
Commenting on the matter, Carl Emmerson, Deputy Director of the IFS, said: 'The Chancellor has . . . penciled in some spending plans for the period from March 2025 that look very questionable. Outside key areas of government, they would imply a return to some austerity, and it's not clear to us that those spending plans really will be kept to the other side of a General Election.
'The scope for tax cuts looks really rather questionable, and Mr Hunt would do better to avoid them.'