No room for tax cuts or spending increases with recession forecast, according to the IFS

Published

2 years ago

October 17, 2023

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A recession is on the horizon and the chancellor “is in a terrible bind” as low growth and high-interest payments on debt mean little room for manoeuvre, according to a respected think tank.

The UK economy is stuck between the possibility of low growth and persistently high inflation, the Institute for Fiscal Studies (IFS) said in its green budget report.

As a result, there is no capacity to cut taxes or increase spending, it said.

Policy makers risk recession if unfunded tax cuts are introduced, as they could cause more inflation and lead the Bank of England to bring borrowing costs up by hiking interest rates or keeping them higher for longer.

Interest rates were brought to 5.25% after 14 consecutive rises in an effort to tame the rate of price rises.

Heightened borrowing costs and lower company profits have led bank Citi (who produced economic forecasting for the report) to expect a “moderate recession” through the first half of next year.

A recession is two back-to-back three-month periods where there is a negative amount of economic growth.

At the same time the government is set to have the largest budget surplus “in a generation” as the amount of tax coming into state coffers will be greater than government outgoings.

State borrowing will be £20bn less than predicted by the independent official forecasters, the Office of Budget Responsibility (OBR).

Rising wages mean more tax is being taken in. Previous analysis from the IFS said the UK’s tax burden is the largest since the Second World War.

Despite overall borrowing estimated to be lower than first thought, the amount of money in interest payments on public debt will grow, the report said.

Echoing statements made by Jeremy Hunt to Sky News last week, the report said £30bn more in interest payments could be paid this year than expected.

Pressure will mount on the government to increase public spending more than current plans but from March 2025 there are likely to be effective cuts in the budgets of government departments and falling spending on public services, the report added.

The publication comes ahead of the chancellor’s autumn statement on 22 November.

The rate of price rises in the UK has remained high with the consumer price index (CPI) measure of inflation at 6.7% in August, more than triple the goal of the UK central bank, the Bank of England.

It’s not just the chancellor who faces pressure. Prime Minister Rishi Sunak has staked some of his political success on a growing economy by making it one of his five priorities.

Latest figures show the rate of economic growth – gross domestic product (GDP) – was 0.2% in August this year after a contraction of 0.5% in July.

“Contrary to previous reporting, the UK’s growth projections have recently been dramatically upgraded with the IMF confirming that the UK will grow faster than Germany, France and Italy in the long term, as well as being the fastest major European economy to recover from the pandemic,” a spokesperson for the Treasury said.

“We must stick to our plan that we are delivering to halve inflation, which will help unlock sustainable growth, support families with the cost of living and get debt falling.”

In response, the Labour shadow chief secretary, Darren Jones said: “Successive failures by Conservatives ministers have left us with low growth, high tax and national debt at the highest level in generations. Britain cannot afford another five more years of the Conservatives.”

UK

Two children and a woman die after shooting in Northern Ireland

Published

7 hours ago

July 23, 2025

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Two children and a woman die after shooting in Northern Ireland

Two children and a woman have died in a shooting in County Fermanagh, police have said.

Two people were killed in the shooting on Wednesday morning, and a third, who was seriously injured, died in hospital in the afternoon.

A fourth person, a man, was seriously injured in the shooting in County Fermanagh, Northern Ireland.

All victims were from the same household, Superintendent Robert McGowan, district commander for Fermanagh and Omagh, said at a news conference.

Police have cordoned off the scene in the village of Maguiresbridge, about 75 miles (120km) southwest of Belfast.

“We can advise there is no ongoing risk to the public,” a Police Service of Northern Ireland spokesperson said.

There was no mention of a motive behind the shooting.

A murder investigation has been launched, with enquiries being at an early stage.

Supt McGowan said at the news conference that police don’t anticipate any arrests being made at this stage.

Emergency services were called to the Drummeer Road area of the village at around 8am on Wednesday following a report raised from the property, Supt McGowan said.

Two people were found dead at the scene, and two others seriously injured.

One patient was taken to the Royal Victoria Hospital, Belfast, by air ambulance and the other to South West Acute Hospital by ambulance. Supt McGowan said the third person died at the South West Acute Hospital.

Drummeer Road is currently closed, police said, warning that this could lead to delays on alternative roads.

Secretary of State for Northern Ireland Hilary Benn said: “The news from Maguiresbridge is tragic and deeply distressing.

“My thoughts are with the victims, their relatives and the local community in Fermanagh. I would urge the public not to speculate and to allow the PSNI to continue their investigation.”

Sinn Fein MP Pat Cullen has expressed her deep shock over the shooting, saying: “Firstly, my thoughts are with the victims and their families at this tragic time.”

DUP MLA Deborah Erskine, who represents the area in the Northern Ireland Assembly, said that the community was “stunned” by the shooting in “a rural, quiet area”.

“Everyone is deeply affected by what has happened this morning,” she said.

UK

Five ‘dangerous’ gang members guilty of murdering boy and man at music video shoot

Published

10 hours ago

July 23, 2025

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Five 'dangerous' gang members guilty of murdering boy and man at music video shoot

Five “violent” and “dangerous” gang members have been found guilty of murdering a boy and a young man at a music video shoot in a north London estate.

The men had gone to the Elthorne Estate in Archway “with the intention of killing anyone they could”, the Metropolitan Police said.

And the group mistook those they attacked for rival gang members.

Lorik Lupqi, 21; Jason Furtado, 28; Abel Chunda, 29; Xavier Poponne, 22; and Eden Clark, 31, were convicted of murdering 15-year-old Leonardo Reid and 23-year-old Klevi Shekaj and attempting to murder 28-year-old Abdullah Abdullahi.

Leonardo and Mr Shekaj were fatally stabbed and Mr Abdullahi was badly hurt when knifemen descended on the event on the night of 29 June 2023.

Leonardo and his brother had been watching a music video being filmed with friends.

Police said Lupqi, a gang member from Islington, saw the gathering at around 8.30pm and took it as an opportunity to hurt those he thought were gang opponents.

He messaged his girlfriend stating that “opps were outside”. She advised him to remain inside, but Lupqi decided to contact his close friend and gang associate Jason Furtado.

They formed a plan and recruited gang members Chunda, Clark and Poponne to travel to the estate.

Lupqi had booked a taxi to pick up the three men from the area of Furtado’s home address in Canonbury, north London, telling the cab firm: “I’m in a little bit of a rush,” the jury heard.

They had worn masks and were armed as they went to the Elthorne Estate where they met Lupqi, the court was told.

By the time they arrived, the filming had ended, and most people had left, but some local children and teenagers remained in the area.

The group then carried out their deadly attack.

The alarm was raised as a black-clad figure wearing a balaclava was spotted crouching down and moving towards Leonardo, his brother and others, with a large knife.

Three more males in black stood up from where they had been hiding behind cars as they edged towards the group, the court was told.

Leonardo was stabbed in the chest, with the wound cutting through his left lung and one of the major blood vessels in his body, causing fatal blood loss.

Leonardo’s brother had run away from the scene but later looped back and saw his sibling lying motionless on the ground, the court heard.

Mr Shekaj was stabbed in the back, with the wound cutting through his left lung and deep into his body.

He was driven to Whittington Hospital by members of the public but he died on arrival.

Detective Inspector Jim Barry said: “These violent men went into this estate with the intention of killing anyone they could, under the false impression that those there were rival gang members.

“This was a senseless, violent act which has shattered the lives of so many, especially Leonardo and Klevi’s loved ones.

“This dangerous group of men will now spend a long time behind bars but the effect of what they did will be felt by the victim’s shattered families for longer.”

The five killers will appear at the same court on 25 and 26 September for sentencing.

UK

Third person dies after shooting in Northern Ireland

Published

10 hours ago

July 23, 2025

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A third person has died in a shooting in Co Fermanagh, police have said.

Two people were killed in the shooting on Wednesday morning, and a third, who was seriously injured, died in the afternoon.

A fourth person was seriously injured in the shooting in County Fermanagh, Northern Ireland.

All victims were from the same household, Superintendent Robert McGowan, District Commander for Fermanagh and Omagh, said at a news conference.

They have cordoned off the scene in the village of Maguiresbridge, about 75 miles (120km) southwest of Belfast.

“We can advise there is no ongoing risk to the public,” a Police Service of Northern Ireland spokesperson said.

There was no mention of a motive behind the shooting.

A murder investigation has been launched.

Supt McGowan said at the news conference that police don’t anticipate any arrests to be made at this stage.

Emergency services were called to the shooting in the Drummeer Road area of the village at around 8am on Wednesday, a spokesperson for the Northern Ireland Ambulance Service said.

They confirmed that two people had been injured.

“Following assessment and initial treatment at scene, one patient has been taken to the Royal Victoria Hospital, Belfast, by air ambulance and another to South West Acute Hospital by ambulance,” the spokesperson added.

Drummeer Road is currently closed, police said, warning that this could lead to delays on alternative roads.

Secretary of State for Northern Ireland Hilary Benn said: “The news from Maguiresbridge is tragic and deeply distressing.

“My thoughts are with the victims, their relatives and the local community in Fermanagh. I would urge the public not to speculate and to allow the PSNI to continue their investigation.”

Sinn Fein MP Pat Cullen has expressed her deep shock over the shooting, saying: “Firstly, my thoughts are with the victims and their families at this tragic time.”

DUP MLA Deborah Erskine, who represents the area in the Northern Ireland Assembly, said that the community was “stunned” by the shooting in “a rural, quiet area.”

“Everyone is deeply affected by what has happened this morning,” she said.