Closing post
Time for a recap
The International Monetary Fund (IMF) has “advised the UK against further tax cuts”.
In its latest assessment of the world economy, the IMF said the government should prioritise preserving public services and investment, while keeping debt levels under control.
An IMF spokesperson said:
“Preserving high-quality public services and undertaking critical public investments to boost growth and achieve the net zero targets, will imply higher spending needs over the medium term than are currently reflected in the government’s budget plans.
“Accommodating these needs, while assuredly stabilising the debt/GDP ratio, will already require generating additional high-quality fiscal savings, including on the tax side.”
The chancellor, Jeremy Hunt, hit back, saying:
“The IMF expect growth to strengthen over the next few years, supported by our introduction of the biggest capital investment tax reliefs anywhere in the world, alongside National Insurance cuts to improve work incentives.
It is too early to know whether further reductions in tax will be affordable in the Budget, but we continue to believe that smart tax reductions can make a big difference in boosting growth.”
The IMF also lifted its forecast for global growth, and said that a “soft landing” was in sight for the world economy.
But there was gloom in the UK, with corporate insolvencies in England and Wales hitting their highest level since 1993 last year.
In a busy day for economic data, the eurozone has narrowly avoided recession.
GDP across the euro area was flat in October-December, despite a 0.3% contraction in Germany. France stagnated, while Italy, Spain and Portugal all grew.
Here’s the rest of today’s news:
There’s been drama in the energy market today, with Saudi Arabia abandoning plans to grow its crude production capacity by 1m barrels a day.
The world’s biggest exporter signalled a big change in policy by ordering the state oil company, Saudi Aramco, to drop plans to expand its maximum production capacity to 13m barrels a day by 2027.
