UK’s Jeremy Hunt to announce tax cuts

Hunt will announce an increase to the National Living Wage of more than £1,800 ($2,253.78) per year for a full-time worker, and extend the threshold to cover 21-year-olds for the first time.

The increase of almost 10% will take hourly pay to £11.44 an hour, while National Minimum wage rates for younger workers will also rise, with 18-20-year-olds receiving an hourly boost of £1.11 to take the minimum wage to £8.60 per hour.

The Department for Business and Trade estimates 2.7 million workers will directly benefit from the National Living Wage increase.

– Elliot Smith

Hunt is set to announce a cut to National Insurance contributions for millions of workers on Wednesday, along with a reduction in business taxation and tougher treatment of benefits claimants, multiple British news outlets reported Tuesday.

The BBC reported that Hunt will announce measures to boost business investment by £20 billion ($25.04 billion) per year in a bid to “get Britain growing.”

The government has also pre-announced plans to withdraw support for benefit claimants who fail to find work after 18 months, unless they undertake a work experience placement.

– Elliot Smith

Sticky global inflation and domestic supply-side challenges mean the government is unlikely to break from the cautious approach seen over the past year, according to Berenberg Senior Economist Kallum Pickering, who said Hunt faces “too many problems, too little time.”

Despite the suggestion of incoming tax cuts on Wednesday, Pickering said Hunt will struggle to announce policies that could “materially improve the near-term economic outlook,” and will likely focus on reducing the deficit and debt as a percentage of GDP.

“Any large and immediate debt-financed tax cuts or spending increases would likely stoke fresh inflation worries and a renewed spike in…