CEBR taxes will have to rise
Link: CEBR taxes will have to rise
The Centre for Economics and Business Research (CEBR), has warned that Chancellor Gordon Brown may have to raise taxes. The group said that “stealth taxes” equivalent to three pence on income tax could be introduced. The comments came after Mr Brown suggested that UK economic growth would be lower than the government had forecast.
Mr Brown had forecast that UK growth would be 3-3.5%, analysts, however believe that figure could now be 2.5% or less.
Speaking in Washington, Mr Brown said that difficult global economic conditions, the boom in oil prices a high house prices had all adversely affected the UK economy.
Although Mr Brown did not downgrade the Treasury’s current official forecasts for growth, analysts have taken his comments as an indication that such a move may be necessary.
Douglas McWilliams, CEBR’s chief executive said the chancellor had failed to take notice of reports by some independent forecasters suggesting that the UK economy was slowing down.
He said: “While it is certainly true that high oil prices are likely to mean a weak economy in 2006, the current year’s slowdown started just after Christmas and ought to have been staring the chancellor in the face when he made his forecasts for the March Budget”.
Mr Brown told a meeting of the International Monetary Fund in Washington on Saturday: “Britain is continuing to grow faster this year than the other major European economies, all of whom are forecast to grow by less than 2%, with just 1.2% growth in the euro area.”
