Labour's first budget in 15 years, while increasing spending significantly, is not expected to boost the economy's growth rate over the next five years, according to the OBR.
The OBR warns that the expanded state could crowd out business activity, leading to a projected 1% decline in living standards by the end of the forecast period.
A historic increase in taxes, as high as 38% of national income by 2029-30, marks the government's move to expand the state and cover increased spending.
David Miles notes that as the government allocates 2% of national income for public services, a decline in disposable incomes is unavoidable due to competition for resources with the private sector.
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