UK Finance Minister Jeremy Hunt said that he would have to hike certain taxes and introduce budget cuts to fix Britain's public finances. Hunt said that cuts to public services would be balanced.
Hunt said poorer households should be spared much of the pain. Hunt added that he did not want to aggravate an expected recession but had to show he could lower a budget deficit which has soared after the COVID-19 pandemic and Russia's invasion of Ukraine, Reuters reported quoting the minister.
“If you do nothing, if you don't show that we're going to bring our debt down, interest rates get higher and you get a recession that's made worse," Sky News reported quoting Hunt.
Following Liz Truss and Kwasi Kwarteng's mini-budget debacle which led to a bond market rout, UK Prime Minister Rishi Sunak and Jeremy Hunt warned of tough decisions to tame 10 per cent inflation.
"We're all going to be paying a bit more tax, I'm afraid," Reuters reported quoting Hunt.
The Sunday Times reported that Hunt plans to handle freeze thresholds and allowances on income tax, national insurance, inheritance tax and pensions for a further two years to fix 55 billion-pound deficit in Britain's budget.
However, lawmakers in Conservative party fear that higher tax hikes could revive tensions within the party.