Rishi Sunak Delay Plans For Tax Rises

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Rishi Sunak Delay Plans For Tax Rises

Rishi Sunak set to delay plans for tax rises in March budget.

Chancellor Rishi Sunak is expected to delay plans for tax rises in his March budget as the coronavirus pandemic continues to wreak havoc on the UK economy.

Sunak has already warned that the UK is facing huge levels of debt thanks to the health crisis and it could become unaffordable if interest rates suddenly rose.

The government is likely to borrow £370bn ($501bn) this year, more than double the £158bn deficit in the peak year of the financial crisis.

Delay Plans For Tax Rises

A senior government source told the Times that it was the “wrong time” for tax rises and that they were likely to be shelved until the autumn at the earliest.

The new variant of COVID-19, which is thought to be between 50-70% more transmissible, sent the UK into its third nationwide lockdown.

Vast swathes of the UK economy now face at least seven weeks of severely limited trade, with many firms forced to shut up shop altogether. Cabinet minister Michael Gove said on Tuesday the restrictions could last into March.

Earlier this week Sunak announced £4bn in new grants to support retail, hospitality and leisure firms, and another £594m for struggling firms in other sectors.

The chancellor said firms forced to close would receive one-off grants worth up to £9,000 per site, in a move welcomed by business leaders. Other hard-hit firms will be able to apply for a funding pot from local authorities.

The package overall is expected to support more than 600,000 firms, and is provided on a per-property basis.

Investors are also betting that the Bank of England (BoE) is likely to cut the UK’s interest rate.

The Bank of England cut interest rates to a record low of 0.1% last year to cushion the initial economic blow from the COVID-19 pandemic.

The next Bank of England policy meeting is at the beginning of February.

Source: YAHOO!