Chief economist gives his views on what the budget will bring
Chancellor George Osborne will deliver his budget on Tuesday and while many believe that the massive spending cuts pose a threat to the fragile recovery, he said they will save Britain from the problems which debt-stricken Greece faces.
Speaking to the BBC’s Andrew Marr Show today, Mr Osborne said: “Unless we take determined and concerted action, we will find our country on the road to ruin”.
Jeremy Cook, chief economists at World First, the currency exchange broker, believes a VAT rise is on the cards, as well as a rise in capital gains tax (CGT) – this is the levy firms or individuals pay on the profit gained from selling assets. It is currently set at a flat rate of 18%.
Meanwhile, VAT could possible rise to 20% (from its current 17.5%) and this would bring in around £12.5 billion in receipts, but at a cost of £425 per annum to the average household.
However, no changes are expected to income tax, inheritance tax or corporation tax, said Mr Cook.
Furthermore, he expects to see a bank levy imposed – this is aimed at clawing back billions paid by the state to bailout the financial sector after the financial crisis.