The Office for Budget Responsibility (OBR) predicted that the growth rate would reach a peak of 2% next year before reverting to about 1.5% later in the legislative year.
Asserting that a new strategy for investment will support improved economic performance and “more pounds in people’s pockets,” the administration has built its reputation on generating growth.
However, according to the OBR, the budget would raise interest rates and inflation in the near future, which would have an impact on growth.
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Prompting the ‘pain’ of tax increases to affect employment and salary increases.
According to the OBR, overall, that would leave the economy’s size “largely unchanged in five years” in comparison to its prior growth forecast.
“Every Budget I deliver will be focused on our mission to grow the economy,” Chancellor Rachel Reeves stated during her statement.
“An end to short-termism” was another pledge she made.
In order to support increased spending on public services, the package of proposals calls for tax rises of £41 billion annually by the conclusion of the current parliament.
