Danni Hewson, Financial Analysis Director at AJ Bell, stated in a report that while UK Chancellor Rishi Sunak continues to emphasize cautious fiscal management, he’s likely breathing a sigh of relief in private. This is because the government’s latest borrowing data has provided him with some flexibility to consider tax-cutting measures to appease the public before the next general election.
Hewson noted that public sector borrowing in July was significantly lower than expected, partly due to increased contributions from individual income tax and value-added tax.
However, with rising unemployment and sluggish economic growth, there may be risks to tax revenue. If the cost of living crisis is not alleviated, the government could face greater pressure to intervene once again.
