The UK’s Slowing Economy Revealed By Weak Tax Receipts
Rishi Sunak is set to face increased pressure to offer a significantly larger financial package following the figures of April’s public spending deficit. Despite the government and the cabinet’s claims to be extremely concerned about the country’s current cost of living crisis escalation and low-income families struggling to navigate the crisis, the latest figures show that the government only borrowed £18.6bn in April (according to the Office for National Statistics) – a significantly lower figure than many were expecting following the borrowing of £24.2bn in April 2021.
This improvement in borrowing figures has failed to mask the weaker-than-expected tax receipts that highlight the progressive slowing of the UK economy.
The forecasted tax receipt by the Office for Budget Responsibility (OBR), the Treasury’s independent forecaster, stood at £72.3bn, yet the central government’s tax receipts came in a figure below this forecast, standing at £70.2bn.
This weak tax receipt showcases the current state of the UK economy, which is progressively slowing as we try to navigate the cost of living crisis.
This can be put down to a range of private sector activities taking place and finding growth in the serving sectors as well as the inflationary pressure placed on manufacturing outputs.
Following these figures, it is believed that chancellor Rishi Sunak will be feeling the pressure.
He recently stated: “While we are doing what we can to help families deal with rising prices, inflation is also pushing up our spending on debt interest – which is expected to reach £83bn this year. […]
We must take a balanced and responsible approach to support people now, while also not burdening future generations, and we’re on track to drive public debt down by 2024-25.”
Here Sunak proclaimed again his determination to help low-income families who are struggling with the cost of living crisis whilst also reinforcing his determination to improve the UK’s economy for later generations by reducing public debt as much as possible.
The UK’s total debt, not including figures from public sector banks, was most recently £2.35tn in April to a gross domestic product (GDP) of 95.7%.