UK economy growth forecasts lowered from next year

"The UK economy is expected to grow at a slower rate than previously expected from next year, the government's official forecaster has said. The Office for Budget Responsibility (OBR), which maps out how the economy is set to perform based on the government's tax and spending policies, increased its growth expectations for this year, but downgraded its forecast for the following four."

"The OBR's report said that income tax thresholds would be frozen until the end of the 2030-31 financial year. The OBR said the Budget "raises taxes by amounts rising to 26bn in 2029-30, through freezing personal tax thresholds and a host of smaller measures", adding it would result in the tax take reaching an "all-time high of 38% of GDP in 2030-31"."

The Office for Budget Responsibility raised its growth forecast for this year to 1.5% from 1%, but downgraded growth for the next four years. Growth is projected at 1.4% in 2026 and 1.5% in each of the following four years, all lower than March projections. Income tax thresholds will be frozen until the end of 2030-31, generating up to £26bn in higher taxes by 2029-30 and driving the tax take to an expected 38% of GDP in 2030-31. The threshold freeze will add substantial numbers of new basic-, higher- and additional-rate taxpayers. The OBR expects inflation of 3.5% this year. The forecast was published in error ahead of the Chancellor's Budget.

Read at www.bbc.com