UK announces tax cuts and benefit hikes in new economic plan

LONDON – In a bid to stabilize the UK’s financial landscape, Finance Minister Jeremy Hunt unveiled the Autumn Forecast Statement today, outlining a series of measures aimed at reducing debt and boosting employment. The strategy includes significant cuts in business taxes and an increase in working-age welfare benefits, which will be adjusted to September’s inflation rate of 6.7%.

The Office for Budget Responsibility (OBR) has forecasted that these efforts will help bring inflation down to the target rate of 2% by 2025 while also contributing to GDP growth. In support of these goals, the government has affirmed its commitment to assist the Bank of England in achieving the inflation target.

Further bolstering financial security for retirees, Hunt announced that pensions would rise by 8.5% in April 2024, honoring the triple lock scheme. This scheme ensures that pensions grow by whichever is highest: average earnings, inflation, or 2.5%.

In addition to these measures, Hunt confirmed that alcohol duty rates would remain frozen until August next year. The government is also set to enhance support through local housing allowances.

Despite these significant economic announcements, the exchange rate remained relatively unaffected, holding steady at 1.2535. This suggests that markets had anticipated the government’s moves or that other global factors are currently playing a more dominant role in influencing currency valuations.

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