Spring Forecast Statement 2022

The economic headwinds facing the Chancellor are severe.  The public coffers are partially drained from the generous government support during the Covid crisis. The cost of borrowing is increasing as Interest rates are rising in the UK to help control the alarming rise in the rate of inflation because of the disruption in global supply chains. And, if that wasn’t enough, we are experiencing an energy crisis not seen in many of our lifetimes as a result of the war in Ukraine.

The result is that the cost of living in the UK is increasing dramatically and that is feeding through via a very difficult labour market to wage inflation, as individuals strive to keep up with the increase in their day-to-day costs. Business will begin to fail as the necessary price increases to remain viable meet squeezed consumer resistance.  

All of this presents a rosy picture for the Chancellor and his commitment to raising money to fund the NHS and social healthcare.  However, reports are that perhaps as a result of bringing about the highest tax burden in living memory he had a little bit tucked up his sleeve.  Although there is a bit of a wait – by the end of this Parliament (2024) - he has done the next best thing and announced an income tax rate cut from 20% to 19%.