Ministers complain to Treasury over spending cuts

Published On Oct 17, 2024, 2:54 AM

Cabinet ministers have expressed concerns to the Treasury about proposed cuts to departmental budgets as the UK government faces a significant funding gap of £40 billion for public services. This situation could lead to the largest tax increases in a generation as Chancellor Rachel Reeves prepares for a budget statement on October 30. The government is reportedly committed to maintaining its promise not to raise taxes on working individuals, which adds complexity to the budget discussions. Potential tax increases could include extending National Insurance to employer pension contributions and capital gains tax hikes, along with higher fuel taxes amid declining petrol prices.

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Stock Forecasts

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Negative

The concerns over funding cuts and the potential for increased taxation might lead to market uncertainty, especially in sectors sensitive to government spending such as public services and infrastructure. However, if the government's plans are perceived as a necessary step to stabilize the economy, long-term recovery could stabilize some related sectors.

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