Will the economy grow?
The UK’s Autumn 2024 Budget introduced by Chancellor Rachel Reeves aims to support economic growth, though its potential for a short-term economic boost is seen as limited by many experts. This budget is primarily focused on stabilising the economy by addressing cost-of-living pressures, maintaining fiscal discipline, and managing inflation. Key policies include infrastructure investments, particularly in energy and public transport, with some additional planning reforms aimed at kickstarting the housing market. However, substantial tax changes on income, VAT, and National Insurance have been avoided, as the government remains cautious about imposing additional burdens on households.
To drive growth, the budget also emphasises targeted initiatives like increased support for education and skills development. For instance, efforts to improve workforce skills are intended to address labour shortages, particularly in sectors like healthcare and technology. These policies could strengthen long-term economic growth by boosting productivity and increasing employment opportunities.
However, concerns persist about the budget’s short-term impact. Critics argue that limited changes to consumer and business taxes may dampen any immediate economic uplift, as consumer spending remains constrained by inflationary pressures. Additionally, policies like potential adjustments to Capital Gains Tax and Inheritance Tax have left business owners uncertain, which could limit investment activity in the near future.
In summary, while the Autumn 2024 Budget introduces measures that could strengthen economic growth in the long term, its immediate impact may be modest, with full effects potentially only visible over a more extended period.
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