Huge tax cuts and a borrowing surge: The Chancellor has opted to boost short term growth and interest rates while setting the public finances on an unsustainable path – here are five key takeaways from today’s #MiniBudget – THREAD🧵
1 - £45 billion of tax cuts were announced today – going far beyond election promises to cancel corporation tax increases and reverse this year’s National Insurance rise. These are the largest tax cuts to be announced in a single fiscal event since the 1970s. Graphic reading: Biggest tax cuts since the 1970s: The £45
2 - A record increase in borrowing: The decision to combine the largely unavoidable higher deficit caused by rising energy prices/interest rates with permanent tax cuts will drive up borrowing by £411 billion in coming years. No Chancellor has increased borrowing by so much. A record increase in borrowing: Combining the largely unavoi
3 – Future spending could be on the cards: The Chancellor has said that debt falling remains his key metric for fiscal sustainability – but achieving that during the middle of this decade could require spending cuts of £35 billion in 2026-27. Future spending cuts on the cards? The Chancellor has said t
4 – Almost two-thirds (65%) of the gains from personal tax cuts announced will go to the richest fifth of households: Almost half (45%) will go to the richest 5% alone, while just 12% of the gains will go to the poorest half of households. Tax cuts at the top: Almost two-thirds (65%) of the gains fr
5 – Caution needed on growth: While energy support will boost GDP this winter, the borrowing required will also mean higher interest rates. Growth in the years ahead is likely to be driven far more by the path of energy prices than the tax cuts announced today. Caution needed on growth:  While energy support will boost G

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More from @resfoundation

Sep 24
The Chancellor has blown the budget, with his £45bn tax cuts package rejecting not just Treasury orthodoxy but also the legacy of Boris Johnson, unveiling a wholly new approach to economic policy - 6-chart summary of the fiscal statement from @TorstenBell resolutionfoundation.org/comment/blowin…
While the Chancellor did not allow the Office for Budget Responsibility to update its forecasts, we estimate that energy support and the weaker economic outlook will increase borrowing by £265 billion over the next five years. Change in public sector bor...
The tax cuts are strongly focused on higher-income households: next year someone earning £200,000 will gain £5,220 a year, rising to £55,220 for a £1 million earner. Those on £20,000 will gain just £157. And almost half the gains will go to the richest 5% of households... Impact of personal tax poli...
Read 11 tweets
Sep 24
NEW Blowing the budget - the RF overnight analysis of the Chancellor's September Fiscal Statement. Here's a short thread of the key highlights ahead of you reading the full 31 page report.... 🧵resolutionfoundation.org/publications/b…
The Chancellor’s huge package of personal tax cuts will disproportionately benefit London and the South East – with households in these regions standing to gain to three times as much on average (£1,600) as those living in Wales, the North East and Yorkshire (£500) next year. Image
Middle income Britain stands to lose most from the overall impact of all tax and benefit policies announced over the parliament. The poorest fifth of households gain £90 on average, with the middle fifth losing £780, and only the top five per cent gaining significantly (£2,520). Image
Read 8 tweets
Sep 23
Today the Chancellor announced the largest tax cuts in 50 years, driving a £411 billion borrowing surge that will break all fiscal rules. Here's RF's @FryEmily with a summary of what that's going to mean going forwrads... plus a summary 🧵 to follow
Borrowing is expected to increase by £265 billion over the next five years, due to the additional packages of energy support combined with the deterioration of the economic outlook since March. Tax cuts of £146 billion raise that to £411 billion. Estimated change in public ...
The tax cuts confirmed today largely focus on higher income households, driven by the reversal of the rise in National Insurance and scrapping of the 45p rate of income tax. Someone earning £200,000 will gain £5,220 a year, compared to just £157 for someone earning £20,000. Annual income changes as a ...
Read 6 tweets
Sep 23
Huge tax cuts and a borrowing surge: The Chancellor has opted to boost short term growth and interest rates while setting the public finances on an unsustainable path – here are five key takeaways from today’s #MiniBudget – THREAD
1 - £45 billion of tax cuts were announced today – going far beyond election promises to cancel corporation tax increases and reverse this year’s National Insurance rise. Graphic reading: Biggest ta...
These are the largest tax cuts to be announced in a single fiscal event since the 1970s. Net long-term annual impact...
Read 10 tweets
Sep 23
Five key takeaways from the #minibudget2022 🧵- Key point 1: £45 billion of tax cuts were announced today – going far beyond election promises to cancel corporation tax increases and reverse this year’s National Insurance rise. Graphic reading: Biggest ta...
These are the largest tax cuts to be announced in a single fiscal event since the 1970s. Net long-term annual impact...
2 - No Chancellor has increased borrowing by so much: The decision to combine the largely unavoidable higher deficit caused by rising energy prices/interest rates with permanent tax cuts will drive up borrowing by £411 billion in coming years. Graphic reading: A record i...
Read 8 tweets
Sep 23
Today the Chancellor announced the largest tax cuts in 50 years – the largest in a single fiscal event since Anthony Barber’s ill-fated 1972 Budget – driving a £411 billion borrowing surge that will break all fiscal rules - THREAD 🧵 Net long-term annual impact of tax policy announcements at e
Borrowing is expected to increase by £265 billion over the next five years, due to the additional packages of energy support combined with the deterioration of the economic outlook since March. Tax cuts of £146 billion raise that to £411 billion. Estimated change in public sector net borrowing forecast sin
While extra borrowing is greatest this year (£130 billion) given the scale of energy bill support, the combination of permanent tax cuts, higher interest rates and weaker growth will blow through the previous Chancellor’s fiscal rule on debt falling twice over by 2026-27. Outturn and forecast of public sector net borrowing and debt
Read 11 tweets

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