The Institute for Fiscal Studies (IFS) has stated that the UK has entered ‘a new era of higher taxation and higher spending’ following the 2022 Autumn Statement.
The think tank warned that middle earners ‘will be hit hard’ as a result of the announcements made in the Statement by Chancellor Jeremy Hunt because they do not stand to benefit from targeted support to help with the cost-of-living crisis.
The IFS’s analysis revealed that UK households will be paying energy bills that are £900 higher than they currently are now.
Mr Hunt used the Autumn Statement to announce a reduction in the threshold for the top 45% additional rate of income tax; a reduction in the Dividend Allowance from £2,000 to £1,000 in 2023; and a freeze on the thresholds for the income tax personal allowance.
Commenting on the matter, Paul Johnson, Director of the IFS, said: ‘Jeremy Hunt’s first fiscal event as Chancellor was a sombre affair. Surging global energy prices have made the UK a poorer country. The result is an OBR forecast that the next two years will see the biggest fall in household incomes in generations.
‘This will hit everyone. But perhaps it will be those on middling sorts of incomes who feel the biggest hit.’