The United Kingdom has entered a new era of higher taxes

The Institute for Fiscal Studies’ (IFS) director Paul Johnson said that middle earners were “set for a shock” with taxes going up and prices soaring.

In his Autumn Statement, the chancellor announced plans to increase taxes to shore up the public finances and to provide help with energy bills.

According to the IFS’s review of the proposals, the worst choices regarding budget reductions had been postponed until beyond 2024.

Chancellor Jeremy Hunt recognized “very difficult days ahead” on Friday, but added that his plans gave the public “confidence” about how the government would assist them in navigating the recession.

But Mr. Johnson of the IFS warned that due to slow economic growth, an aging population, and high levels of historical public borrowing, living standards were on the verge of experiencing the “biggest fall in living memory.”

“We actually got a lot poorer, in actuality. We are about to embark on a lengthy, difficult, and painful path that has been made more difficult than it should have been by a number of economic own goals, “added Mr. Johnson.

The UK is in a recession, according to the Office for Budget Responsibility, an independent forecaster for the government, and the economy will contract in 2019.

Mr. Johnson characterized the economic environment as “gloomy” and stated that it would be “decades” before the tax burden reached its pre-pandemic average.

The ideas unveiled will raise taxes by a total of around £25 billion. The measures consist of:

• Tax thresholds will remain frozen until April 2028, increasing taxes for millions of people.
• Instead of £150,000, the maximum 45% extra rate of income tax begins to apply to anybody making over £125,140.
• Instead of the current 3%, local councils in England will now be able to increase the council tax by 5% annually without a local referendum.

People with middle-class earnings, according to Mr. Johnson, would be severely hurt since they wouldn’t receive specialized government assistance.

“Their taxes are going up while their incomes are going down. Middle England will have a surprise, “said said.

After the energy price cap increases in April and without this year’s £400 rebate, households will pay energy bills that are £900 a year higher than they do now, according to the think tank’s analysis.