 confirmed the Government's Energy Price Guarantee will bring down the headline rate of inflation. The ONS said support for households and businesses would lower the unit prices of energy that feed into inflation indexes. James Smith, research director at the Resolution Foundation, warned that Mr Hunt's Autumn Statement is 'likely to involve tax rises, not just spending cuts'. He said: 'While the recent focus has been on conditions i){kind=link}
Plus: Tax rises and spending cuts: Sunak’s dismal choices as he faces £40bn black hole
Britain’s fall into a year-long recession will deal a £23bn borrowing blow to the Chancellor as he draws up a slew of spending cuts and tax rises to restore the country’s economic credibility.
The Resolution Foundation warned that Jeremy Hunt will be forced to push up taxes as well as slash department budgets to fill the black hole caused by a darker economic outlook and the market chaos of “Trussonomics”.
The think tank estimated that Mr Hunt needs to find at least £40bn at the Autumn Statement to have debt falling by 2026-27 and provide himself a £12bn buffer against future shocks – the smallest amount of fiscal space previously set aside by former chancellors.
City economists have predicted that the economy entered a year-long recession in the third quarter as the cost-of-living crisis bites, creating more headaches for Mr Hunt.