Tax & Spend
Room for UK Tax Cuts Reduced as Economic Growth Potential Falls
- OBR has reduced its estimate of the economy’s productivity
- Estimate will feed into calculations for annual budget plan
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Chancellor of the Exchequer Jeremy Hunt will have less headroom for giveaways in his March budget because chronic worker shortages and weak productivity have damaged the country’s economic growth potential.
The judgment has been made by the Office for Budget Responsibility, the independent fiscal watchdog, which will produce the growth forecasts alongside the budget. The figures will help determine how much the chancellor can spend against his self-imposed borrowing rules.