The British budget deficit is 8 billion pounds sterling
The British Treasury is likely to announce its largest budget deficit in 25 years. This is what Bloomberg writes. This causes problems for the Chancellor of the Exchequer, Jeremy Hunt, who cannot move forward with planned tax cuts and investments in the public sector.
There is usually a financial windfall in January, when households and businesses pay their taxes. However, that is not the case this year as government spending has spiraled out of control on soaring debt and financial compensation for families in the worst livelihood crisis in generations.
Also read | The British economy stagnated due to inflation
Economists expect a budget deficit of more than £8 billion, the largest deficit in January since the measurements began. To make matters worse, the UK’s national debt is almost as large as the economy, which has not been seen since the 1960s.
The figures, due on Tuesday, are one last look at public finances before Hunt presents the budget on March 15. He will do so in the midst of economic recession, industrial turmoil and growing desperation among the ruling conservatives who see their constituents disappear like snow in the sun.
Also read | Unions want wage increases anyway.
Thus, the tension between Hunt and the Conservatives is growing, because the same Conservatives say tax cuts are inevitable to help afflicted families, to get the economy back to work and to avoid a complete electoral rout in a general election within two years.
Hunt is also under pressure from a range of professional groups. From civil servants to health workers and from teachers to public sector workers. They feel they are not being adequately compensated for the high inflation, and so have been on strike since the summer.
So far, Hunt has proven resolute, ruling out big tax cuts at least before the spring local elections, and caving in to union demands. He says the priority is to cut inflation in half by 2023.
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