The Resolution Foundation has recommended that Chancellor Rachel Reeves raise taxes to adhere to fiscal rules as the UK's economic outlook worsens significantly. With increasing interest rates and diminishing tax revenues, a fiscal tightening is expected in the upcoming Spring Statement. They warn against adversely impacting lower-income households while suggesting that extending the tax thresholds freeze could raise £8bn without immediate effects on living standards. Experts stress that a long-term approach is necessary to prevent harm during fiscal consolidation amid rising pressures.
"The chancellor must act decisively to meet her fiscal rules. But with the jobs market in recession territory, lower income households shouldn't bear the brunt of any consolidation."
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