Rishi Sunak must cut business taxes now to save the economy from recession, the Confederation of British Industry has warned, as the cost of living crisis derails the Covid recovery.
The Chancellor promised that ‘in the autumn we will introduce a series of tax cuts’ but Tony Danker, the group’s chief executive, said it would be too late and the government had to act immediately.
He said: ‘We already have a cost of living crisis, are we really going to wait for a full blown recession before the government starts to seize on it?
“The government needs to pull this all together now and think about the range of big actions and small actions that will boost business confidence and investment. We need corporate tax cuts.
Traditionally, the Chancellor aims to make major tax and spending announcements only during the annual budget and spring statement, but this year the intensity of the cost of living crisis and the rate at which it has engulfed the economy forced Mr. Sunak to catch up.
This includes municipal tax relief and a loan on energy bills announced in February, before the war in Ukraine and more than a month before the spring declaration, followed by another announcement of help with bills last month. .
Pressure is already mounting for more support for households, as well as the tax breaks the CBI wants to keep investment growing and improve the long-term outlook for the economy.
The CBI has slashed its growth forecast as runaway inflation saps family finances, pushing households “into recession” with only the recovery in business investment preventing the economy from entering a formal recession, broadly defined as two consecutive quarters of GDP contraction.
He expects the economy to grow 3.7% this year and just 1% next year, down from previous forecasts of 5.1% and 3% respectively.
Mr Danker said: ‘We expect the economy to be about flat. It won’t take much to tip us into a recession. And even if we don’t, it will be one for too many people.”
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This notice was published: 2022-06-12 10:45:29