The UK Conservative government announced a £10 billion ($13 billion) labour tax cut, drawing from emergency reserves, possibly the last budget before an anticipated election defeat. To combat rising living expenses, the £13.9 billion package also includes frozen gasoline levies and expanded access to child benefits.
The election is anticipated later this year, with PM Rishi Sunak trailing Labour by 20%. Experts warn against rash expenditure plans even as forecasters predict £9 billion in fiscal space.
Financial markets remained stable, unlike the 2022 bond market turmoil from Liz Truss’s tax cuts. The budget includes extensions to energy levies, e-cigarette taxes, and duties on tobacco and non-economy flights. Tax adjustments target non-domiciled residents and foresee a rising tax burden until 2028–29, the highest since 1948. The Institute for Fiscal Studies discourages relying on hazy borrowing projections.
Many regions face financial crises, court backlogs soar, and public service quality declines. Hunt and Sunak pledged an accelerated economic recovery post-recession, with modest growth forecasts of 0.8% in 2024, rising to 2.0% by 2026, and inflation expected to drop below 2%. The government hopes these measures will address economic challenges and bolster public confidence.
