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UK Budget 2003 — Will taxes have to rise?
Publication year - 2003
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/1468-0319.00392
Subject(s) - treasury , economics , revenue , commit , flexibility (engineering) , public expenditure , economic policy , public spending , recession , point (geometry) , public finance , finance , macroeconomics , political science , geometry , mathematics , management , database , politics , computer science , law
The Budget was a non‐event from a macroeconomic perspective, with the Chancellor announcing virtually no net discretionary change in the fiscal stance. But he had to raise his public borrowing forecasts significantly to reflect the impact of the economic downturn on revenues, even though he has allocated all of the costs of the Iraqi war to last year. The Treasury projections for GDP growth and the public finances remain on the optimistic side, and he is leaving himself less and less room for maneouvre in the medium term. Taxes may well have to go up at some point in the next few years, especially if there are pressures for a pre‐election public spending boost. But EMU membership — which would require the Chancellor to commit to balancing the budget over the cycle — looks to be some way off. The Chancellor's main focus was on microeconomic initiatives to improve the flexibility of the economy. But the measures announced in the Budget are not substantial enough to have a major impact on the UK's supply‐side performance.