Labour Incompetence8 Nov 2024 10:09
THE Bank of England has warned that Britain is facing a fresh rise in inflation as Rachel Reeves’s tax-and-spend Budget piles extra pressure on households and businesses.
Lenders have been raising mortgage costs in recent days despite the Bank’s highly anticipated interest rate cut to 4.75 per cent yesterday, with financial markets betting it will be the final cut this year.
In his first assessment of the Chancellor’s maiden Budget, Andrew Bailey, the Bank’s governor, said the “substantial” increase in public spending and tax changes that “clearly raise the cost of employment” would push prices higher over the next three years.
Ms Reeves is pressing ahead with plans to spend billions of pounds of taxpayer cash on public investment projects, including one similar to Joe Biden’s green energy plan that he says will tackle inflation and create jobs.
It came as shares on Wall Street continued to hit record highs amid expectations of tax cuts and deregulation under Donald Trump when he takes office on Jan 20 next year. Analysts believe Mr Trump’s plans to slash regulation will fuel the stock market rally even further. Evercore ISI said the S&P 500, the main index of corporate America, could rise by another 11 per cent by the end of June 2025, building on record highs.
The president-elect has signalled that he wants to extend a programme of sweeping tax cuts that are due to expire next year. Mr Trump has called for corporation tax to be cut from 21 per cent to 15 per cent for certain companies as well as more tax breaks for investment.
By contrast, Ms Reeves last week announced a £40 billion tax assault, largely on workers and businesses, that forecasters say will affect wages, prices and jobs.
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