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September 10, 2021

The Telegraph – Growth plummets amid warning that tax raid risks derailing recovery

View this article here.

Alarming figures showed Britain’s post-Covid recovery grinding to a virtual halt in July just days after Boris Johnson unveiled plans for a £36bn tax raid.

The anaemic growth of just 0.1pc leaves the economy 2.1pc below its pre-pandemic peak during a month when the surging delta variant triggered a ‘pingdemic’ of absent workers and companies scrambled for raw materials amid global supply chain disruption.

The weakest growth for six months came after Bank of England Governor Andrew Bailey warned MPs of “some levelling off of the recovery” despite the lifting of pandemic restrictions on July 19.

Economists also warned of the impact of the Government’s latest tax grab on the economy as rises in National Insurance and dividend levies from next April are set to bring tax as a share of the economy to the highest since the Second World War.

Josie Dent, managing economist at the Centre for Economics and Business Research, said: “This week’s announcement of a rise in National Insurance could also impact economic growth looking ahead, as consumers are left with less to spend after taxes. Also, the upcoming end of the furlough scheme and termination of the £20 a week universal credit uplift also present risks to the recovery.”

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