Finance Minister Rishi Sunak announced the Autumn Budget in the House of Commons on Wednesday. His speech began with a briefing on building a new post-Covid economy. transportation, health, education, etc. tax and spending plans for
The impact of global supply chain disruptions on the UK has increased due to Brexit, according to financial watchdog OBR. Although a successful vaccine rollout has helped reopen the economy, supply bottlenecks still exist due to rising energy prices and a labor shortage.
Let’s take a brief look at the top 10 highlights of the budget.
- The Chancellor said the UK economy has been negatively impacted by rising inflation, and the Office of Budget Responsibility (OBR) has estimated inflation levels to average 4% next year.
He added that increasing inflationary pressure is now a global phenomenon, but that Boris Johnson’s government will take the necessary steps to provide support to households.
- According to OBR forecasts, the economy is expected to grow by 6.5% this year and by 2022 the economy will return to pre-pandemic size. GDP growth will be 6% next year and 2.1%, 1.3% and 1.6% in 2023, 2024 and 2025, respectively. The pandemic scared the economy in the long run, but the OBR revised its same forecasts from 3% to 2%. Unemployment will peak at 5.2%, down from a forecast of around 12% in July last year.
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- New fiscal rules are being created for better management of public finances with the aim of reducing debt as a ratio of GDP. Borrowing in the next 2022-23 fiscal year will be 3.3% of GDP, down from the current 7.9%. A budget deficit of £233.9 billion is projected by the OBR for 2021-22, accounting for 10.3% of GDP in March, and these high debt levels are expected to decline as a share of national income in the future.
- Sunak reviewed the Government’s spending that would lead to a real futures increase for all departments. There will be a £150 billion increase in departmental spending, growing 3.8% per year in real terms. £4.8 billion worth of grant funds will be given to local government.
- Per-student funding is set to increase and return to 2010 levels. There will be an increase of approximately £1,500 per student. Sunak also confirmed that the Government plans to triple its investments to create 30,000 private school places. A total of £5bn will be provided to normalize the education sector affected by the pandemic and funding shortages. Over £200m will be spent on holiday activities and food for school students.
- The first £1.7bn grant was announced by Sunak from the Treasury Leveling Fund. This funding will be for towns and cities, and the funds will be allocated to Labor-led constituencies. Libraries, museums and galleries will come to life in cities such as Leeds, Doncaster and Leicester.
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- Investments in infrastructure will increase as the Chancellor says London-style transport will be created across the UK. Around £21bn will be invested in roads by the government and £46bn will be invested in railways to reduce travel time between cities. In addition to infrastructure, investment in R&D is expected to rise to £22 billion by 2026-27; this will be two years later than previously planned. By 2024-25, £20 billion will be invested in R&D with the aim of making the UK a global science superpower.
- Sunak says social services will receive the biggest increase in the budget in more than a decade. Healthcare spending will increase by £44bn to more than £177bn. Around £11.5 billion will be invested to build 180,000 affordable homes. Total residential investment will be around £24 billion. In addition, a £5 billion fund will be created to get rid of the insecure coating, with a 4% tax levied on developers with profits over £25m.
- A five-step plan to overhaul the alcohol tax has been announced. The number of main tax rates has been reduced from 15 to 6, and tax rates will be directly proportional to how strong the drinks are. Mission bonus ends on sparkling wines and fruit wine. 5% reduction in tax rate on draft beer and cider. The quest on spirits will not increase as previously planned.
- The fuel tax will be frozen for the twelfth year in a row, meaning the cost of an average fuel tank will be reduced by £15 per car, £30 per pickup truck and £130 for heavy vehicles compared to the previous year. 2010 plans. The shipping industry’s tax regulation is also set for a post-Brexit overhaul, with shipping companies aligned with the UK’s net zero targets will benefit from the new rules.