The Prime Minister and his Chancellor are considering tax rises for millions of households and a squeeze on spending. It is to address a black hole of up to £50billion in the public finances.
Rishi Sunak and Jeremy Hunt are expected on Monday to extend a freeze on the thresholds at which people start to pay the different rates of income tax and national insurance, which could result in more people being dragged into higher tax bands as wages increase. Mr Hunt will set out his plans in the Autumn Statement on November 17 and is considering splitting the burden equally between tax rises and spending cuts.
Public sector workers could face deep real-terms cuts to wages, with The Times reporting that the Treasury is looking at an increase of 2% across the board for 2023-24, at a time when inflation is expected to be well above that threshold. A Treasury source told the PA news agency that “no decisions have been taken” and the “independent pay review body process takes place next year”.
