Boris Johnson has signalled that there will be no cuts Westminster income tax rates while inflation continues to soar.
The Prime Minister effectively ruled out early personal tax cuts as he stressed that his focus was trying to help millions of households cope with the “inflationary spike that we need to get through right now”.
Johnson is under increasing pressure from Tory MPs to bring forward a promised 1p cut income tax as the price for surviving a vote of confidence in his leadership last week.
The Scottish parliament sets income tax rates in Scotland but any downward move in the personal taxes in the rest of the UK will put pressure on Scottish Finance Secretary Kate Forbes to follow suit.
But any tax cuts are unlikely as economists predict that inflation could sky-rocket to more than ten per cent this year, with the cost of energy and petrol spiralling.
In figures highlighting the growing risk of recession, the Office for National Statistics said gross domestic product (GDP) fell by 0.3 per cent on the month, after a 0.1 per cent decline in March.
Soaring energy costs forcing consumers to rein in their spending was partially to blame for the sudden reversal.
Speaking on a visit to Cornwall, Johnson said: “We are bringing in tax cuts as fast as we can but what we have also got to do is look after people in a tough time so the prior job...the thing that we are doing at the moment is looking after people who are facing increases in the cost of living.”
SNP Treasury spokeswoman Alison Thewliss MP said people were already being pushed into poverty and forced to cut back on essentials.
She said: “OECD forecasts that the UK is set to have the lowest economic growth performance of all G20 economies bar sanctions-hit Russia is a damning indictment of the Tory government’s harmful policies, including an extreme Brexit.”
“With summer recess fast approaching and the Tories consumed by chaos and infighting, it is critical that Rishi Sunak heeds the warnings and delivers further support to mitigate the Tory-made cost of living crisis and to protect households before it is too late for many.”
The UK’s economy is forecast by the Organisation for Economic Co-operation and Development to grind to a halt next year, to be the slowest in the G7 group of wealthy nations (US, UK, Germany, France, Japan, Italy and Canada).
But a number of Conservative MPs are piling pressure on Johnson and Chancellor Rishi Sunak to bring in personal tax cuts soon, including bringing forward the 1p cut in the basic rate of income tax from 2024, just ahead of what is widely expected to be the next General Election.
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