Connect with us

Hi, what are you looking for?

Captain Of Success
Top Stories

Finance

‘Significant action’ needed to stabilise UK finances, warns OECD

The Organisation for Economic Co-operation and Development (OECD) has warned that “significant action” is required to stabilise the UK’s public finances, urging Chancellor Rachel Reeves to reform fiscal policy.

The OECD recommends scrapping stamp duty, scaling back the pension triple lock, and updating the council tax system.

The report highlights mounting financial pressures from healthcare, pensions, and climate change, which come on top of high debt, rising interest payments, and sluggish economic growth. It follows warnings from other institutions about Britain’s unsustainable debt, with the Office for Budget Responsibility recently forecasting that debt could reach 270% of GDP over the next 50 years.

Reeves, set to present her first budget on 30 October, is expected to increase taxes to tackle £22 billion in government overspending. The OECD suggests revising the pension triple lock, currently tied to the highest of 2.5%, inflation, or wage growth, by aligning it with an average of inflation and wage growth.

Additionally, the OECD calls for the abolition of stamp duty, claiming it discourages mobility in the housing market, and urges a reassessment of the current fiscal rules that equate public investment with day-to-day spending, potentially limiting investment in productivity-enhancing projects.

Other proposals include unfreezing fuel duty, simplifying income tax, and reducing the amount of interest that companies can deduct from their tax bills. The organisation also emphasised the need for updated property valuations for council tax, which are still based on 1991 figures.

The UK’s debt has soared to nearly 100% of GDP, exacerbated by the 2008 financial crisis, the pandemic, and rising energy prices. Economists caution that debt becomes unsustainable when interest payments outpace economic growth—a scenario now facing the UK. Around 9p in every £1 of government spending will be allocated to debt interest payments over the next five years.

The Treasury acknowledges the challenging fiscal environment and said that “difficult decisions lie ahead” as the chancellor prepares for the budget.

    You May Also Like

    Finance

    Labour’s plan to overhaul the non-dom tax regime could cost the UK government up to £1 billion as wealthy individuals flee the country, a...

    Stock Markets

    RUELLE CANINO (left) and GM Janelle Mae Frayna (right) — PHILSTAR FILE PHOTO BUDAPEST, Hungary — GM Janelle Mae Frayna and wonder girl Ruelle...

    Finance

    Running a business in the UK comes with a myriad of responsibilities, and understanding your tax obligations is one of the most critical aspects....

    Stock Markets

    By Justine Irish D. Tabile, Reporter INFORMATION TECHNOLOGY and business process management (IT-BPM) companies in the Philippines face a shortage in artificial intelligence (AI)-equipped...

    Disclaimer: CaptainOfSuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
    The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 Captain Of Success. All Rights Reserved.