Just two weeks ago, Liz Truss told the Tory conference that her priority was ‘growth, growth and growth’. But how much of that can she expect now that her new Chancellor plans to jack up corporation tax from 19 per cent to 25 per cent as the economic headwinds strengthen?
As she never tired of telling us during the leadership campaign, it’s an unusual thing to do at a time of threatened recession: no other G7 country plans to put up taxes in this way. Now that she has agreed to go along with the Sunak plan in the name of assuaging the markets, City forecasters are doing a double-take. Instead of that ‘growth, growth and growth’ we are set for recession – and one that they say will be deepened by the U-turns. Expect more of those this morning at Jeremy Hunt’s statement. Some verdicts:
‘Raising taxes heading into a recession is not the economically orthodox thing to do’
Oxford Economics said on Friday:
Another tax U-turn (following backtracking on abolishing the 45p rate) will add to financial pressure on individuals.
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