The National Institute of Economic and Social Research (NIESR) predicts that the UK Chancellor may breach fiscal guidelines as growth forecasts are downgraded. NIESR anticipates that GDP growth will slow to 1.2% by 2025, down from earlier estimates. Concerns about low business confidence and high uncertainty complicate the fiscal landscape, where a projected £62.9 billion shortfall by 2029/30 looms. Experts at NIESR emphasize that the government's strict fiscal rules hinder effective economic strategies, stunting investment and growth while calling for a comprehensive approach to enhance living standards across the UK.
No headroom means tough choices for the chancellor ahead of the autumn budget.
The chancellor's self-imposed and arbitrary fiscal rules have led to a situation where twice a year the chancellor has to either find further departmental savings or announce politically unpalatable tax rises.
The government's ambition of boosting growth and living standards in every part of the United Kingdom requires a comprehensive, credible plan of economic transformation which is yet to emerge.
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