Is the Chancellor about to crash the economy?

Agree perhaps pp can say. This is posted a lot but how is doing what @Newyearsamebs puts fixing the damage?

Is it that pp are removed from the private sector so they think there’s no issue

Another major failing has been not tacking tax evasion and benefit fraud in the black economy which costs billions per year according to official figures. Not helped at all by the mergers of the previous tax and benefit government departments which caused huge numbers of qualified/experienced civil servants to be made redundant and replaced by call centre workers so huge amounts of experience was lost.

Starmer has already promised to increase defence spending to 2.5% of GDP from its current level of c2.3% in response to increased threats. This increase was in the Labour Manifesto. He has not said exactly when this will happen (weasel words) but he will not be able to go back on the pledge.

Trump is likely insist on NATO member states increasing defence spending to at least 3% of GDP. He may ask for more initially.

UK talks up the contribution on Ukraine. And it has indeed been significant. But we are by no means the biggest defence spenders in NATO. Poland,US, Estonia, Latvia, Greece, Lithuania, Finland and Denmark all contribute more on defence in terms of GDP. Poland is at 4%+, US at 3.5%+

The issue with that is larger companies simply move the money to more favourable tax jurisdictions via ‘management charges’.
I run an SME turning over £3M and one year, paid more Corporation Tax in the UK than Starbucks did. And trust me, our profit was not in the region of theirs 😂At least with the NI it broadly reflects your size. Not that I agree with putting more on the shoulders of smaller SMEs in the private sector who are still dealing with the after shocks of the Pandemic.
The main failure of successive governments has been the inability to get a grip of the aggressive tax avoidance that takes place if you are a large enough company or you can afford the right kind of advisors.

Edited to add
You can tell how common avoidance is - just look at the people who are feted for ‘paying all their tax in the UK.’ What - like most people running SMEs have to?

There is no right direction to go in.

It’s all coming apart in every western economy. We have been running a ponzi scheme for far too long and no-one has ever had a plan other than to keep kicking the can down the road and hope they weren’t the ones holding the bomb when the clock finally ticked down to zero.

At worst, Labour have slightly increased the speed but it’s academic in the long run. All of this tinkering is only re-arranging the deckchairs on the Titanic - everyone is just ignoring the iceberg.

How are they undoing the damaged? How? Explain specifically about the economy and business? What have they done to go in the right direction on growth for the country?

The but, but, but doesn’t matter. The private sector is making huge cuts to employment as a direct result of the increased costs of employing and business costs. The but, but, but is irrelevant. It has crushed any hope of recovery because they very thing needed to pay for everyone - employed people is going south.

No I disagree, it doesn't work anymore. I'm a proud Reform supporter (and qualified finance professional) and couldn't care less what a load of lefties who don't have a clue about economics or business say.

You failed to mention Brexit

The biggest economy crasher in living memory, but let’s not talk about that. Sovereign tea, Union Jack, they need us etc etc but no.. can’t possibly be a negative effect from that incredibly costly handful of magic beans that will never grow into a beanstalk could there.

I think she will be replaced-soon!

As members of NATO we have a commitment to spend 2% of GDP on defence. America basically calls the shots in NATO and Trump is floating the idea of increasing the requirement to 5%.

There may be lower funding from US to make up but recently Trump has been talking about higher GDP defence spending from others, with that pressure on its unlikely we can get there, is there much room left for it now?

Minimal growth, higher prices (NI and minimum wage used as an excuse) is what I think will happen. Not good but nowhere near the impact of Liz Truss and the fiscal event.

But you can't expect 14 years of mismanagement to be sorted in less than a year.
We had austerity which ran down public services followed by Brexit which made business more difficult for many people, then on top of that we had Luz Truss.
Sadly all that will take years to fix nit months

Did anyone seriously think that getting us out of the mess we were left it would be anything other than painful and difficult?

You failed to mention Brexit.

One of my family members has been told by their employer that the lowest performing 30% of last year’s intake should start looking for another job asap as as the employer re shapes the work force in response to increased employment costs.

At the same time, their landlord has said he is selling up in response to increased taxes and proposals on Renters Rights.

Dismal does not really describe it.

This is what i came here to say. I doubt anyone could do as much damage as she did and Cameron before her with the Brexshit referendum.

Labour are trying to undo that damage, but it won't be easy. Nigh on impossible in fact.

@Tlaloc999 why do we have to spend more to defend Europe? Surely we are already a pretty huge player in pumping every thing into Ukraine?IS Albania Romania, Hungary Italy on putins lips for interfering and threats??

Reading the FT survey of economists, it's fair to say that there are plenty who criticize the NI contributions rise.

They all, though, seem to be predicting growth this year, with the UK uniformly expected to outpace all other major European countries (but to lag behind the US and, possibly, Japan).

Various also explained that the negative impacts of the budget would be felt instantly but the positives would take longer to manifest (not that it's a guarantee that they will).

I'm not overly concerned. If growth projections start to be revised significantly downwards, I may feel differently at that point.

It’s why you see some posts still saying how great Labour are doing, public sector and state funded won’t see it yet

But any contraction hits, as you say money needs to come from somewhere. We saw it post crash, post Covid and now bizarrely the gov are doing it without external pressure

Yes because where do they think the money comes from? Magic?

They have fundamentally fucked up here. They have taxed people out of employment, literally. Anyone in the private sector knows what’s going on. It’s really scary times right now. People are/will lose their jobs. No pay rises, restructuring, relocating. It’s a complete shit show and it’s terrifying.

Those groups that are shielded for now: good luck getting any kind of functioning public service or welfare payment. The employee in the private sector are being laid off.

When looking at this graphic, it certainly seems that these bond fluctuations are global. Note how the U.K. tracks both US and Germany pretty closely.

The one stand out from this graph is the Truss mini budget- Uk and US effectively swapped places at that point.

The economy has suffered massively since 2000 as a result of four big events: the financial crisis, covid, the Truss budget, and the war in Ukraine. People can sling mud, but only one of those events - Truss- was the result of UK government action.

Rachel Reeves knew (or should have known - everyone else did) that the public finances were in a parlous state and she should have allowed for this in budget forecasts. Her big mistake - she is not an experienced politician- was to back herself into a corner by promising,in the election campaign, no increases in income tax and VAT. That rookie error meant she had to impose hugely increased taxes on businesses - thus crushing the shoots of economic recovery. That was an own goal.

When Trump takes power and UK has to increase defence spending to defend Europe against Russian aggression, the minimal wriggle room she has will disappear. That is before the billions which will be needed to compensate the victims of the grooming gangs. She might as well bite the bullet now and announce a penny on the rate of income tax.

If she had done that during the election campaign Labour would still have won and she would not be in the ridiculous position she is in.