New Delhi: After Rishi Sunak became the Prime Minister, the first and biggest problem facing him is Britain’s recession (Crisis). Let us tell you that Britain is currently in the grip of recession and its economy may shake more in the coming days. The British government has started trying to deal with it. Prime Minister Rishi Sunak’s government has announced several measures to come out of recession. Sunak’s government has presented a fiscal plan of 5500 crore pounds. The previous day, Finance Minister Jeremy Hunt announced the government’s Emergency Budget, in which the tax rate has been increased significantly.
Increase in tax rates
Windfall tax on energy companies has been increased from 25 percent to 35 percent. A temporary tax of 45 percent has been imposed on electric generators. Apart from this, now people earning 1.25 lakh pounds per annum will also come under the ambit of top tax. Along with this, Sunak’s government has announced that excise duty will not be imposed on electric vehicles from 2025 onwards.
Russia-Ukraine war has profound impact on UK economy
Jeremy Hunt presented the Autumn Statement in the House of Commons, supported by British Prime Minister Rishi Sunak. Inflation is spiraling out of control in Britain. Due to which the government has increased the tax rate. The government was shocked by the mini budget of former PM Liz Truss.
A report by the independent body OBR (Office for Budget Responsibility) was also released along with the budget. It is being said that the war between Russia and Ukraine has caused a sharp rise in energy prices. Due to this, the economy of Britain has suffered a lot. The report says there is no chance of an economic recovery until 2024.
Inflation at record levels
Jeremy Hunt said that the entire world is facing an energy and inflation crisis. He said that with this plan for stability, development and public service, we will face recession. The rise in inflation in Britain has increased the difficulties of the government as well as the common people. The inflation rate in Britain has broken a 41-year record to reach 11.1 percent in October. This is the highest inflation rate since 1981. The inflation rate in September was 10.1 percent.
Hard times for Britain
Experts believe that these are difficult times for Britain. Because ever since Rishi Sunak took over as Prime Minister, people were waiting to see what kind of policy he would come up with to deal with inflation. Now all eyes are on whether the decision to increase the tax will prove to be correct. Because there is no relief in the short term.
What is an economic recession?
If a country’s Gross Domestic Product (GDP) continues to decline for six consecutive months (in the second quarter), this period is called a recession in the economy. Typically during a recession, companies make less money, wages are cut, and unemployment rises. This means that the government gets less money in the form of taxes to spend on public services.