Reuters: UK Chancellor Rishi faces tax increase pressure, British bonds plummet, causing market concerns
Reuters reported on July 4 that after one year in office, UK Chancellor Rachel Reeves has encountered severe challenges, with economic stagnation and bond market volatility forcing her to possibly introduce a new round of tax increases. On July 3, British government bonds recorded the largest single-day drop since the Truss government crisis in 2022, with public debt approaching 100% of GDP. Michael Saunders, senior advisor at Oxford Economics and former member of the Bank of England's Monetary Policy Committee, stated: "Economic growth remains weak, and voters are increasingly disappointed as their living standards have not improved." Data from the Fiscal Institute shows that the scale of a 4 billion pound (approximately 5.5 billion US dollars) tax increase in Reeves' first budget may need to be repeated to fill the fiscal gap caused by stalled welfare reforms and revised economic growth expectations. Simon Harvey, macroeconomist at Swiss hedge fund LB Macro, warned: "Any tax increase must be clearly defined and sufficiently strong, otherwise market confidence will be difficult to restore." Currently, the Labour government lags behind the right-wing Reform Party in public opinion polls, and investors' concerns about the sustainability of public finances continue to intensify.
Original article: https://www.toutiao.com/article/1836700414716928/
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