IFS: ‘Tax rises may not be imminent’
10th July 2020
Higher taxes are inevitable in order to pay off the coronavirus support schemes, according to a leading think tank.
Chancellor Rishi Sunak unveiled another £30 billion of support earlier this week, taking the total cost of Government funding past £190bn.
The Institute for Fiscal Studies (IFS) warns that the UK economy will remain in a "support and recovery" phase for the foreseeable future.
The IFS expects the Autumn Budget and subsequent spending review to contain even more targeted support and potentially further tax cuts.
With the UK economy in its deepest-ever recession, the think tank suspects Sunak will use his autumn speech to usher in a third phase of recovery.
Paul Johnson, director at the IFS, said:
"The time to pay for all this will come. But not this year and not next. Our capacity to do so will depend above all on how the economy recovers.
"So, let's hold in the back of our minds that a reckoning, in the form of higher taxes, will come eventually."
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