A breathing space Budget? This is asphyxiation

John Healey's pre-Halloween Budget has been described as a "breathing space Budget," but many see it as a recipe for economic asphyxiation. In his mantra of "Breathing space now, hope for the future," the Chancellor attempted to balance small interventions and tax increases amid a backdrop of dire economic forecasts. However, the budget is packed with nearly 100 new measures, covering topics from data centre connections to ISA reforms and business rates relief, along with new taxes on banks, savers, and landlords.

The economic outlook is grim, with the economy expected to grow by just 1% next year, while inflation is forecast to peak at 4% and average 3.4% throughout the year. Stagflation, a period of stagnant growth and high inflation, is on the horizon, with unemployment projected to rise above 5% next year.

The OBR has warned that the government's announcements could lead to no growth in real earnings in 2027 and 2028, and a slight decline in real household disposable income in the near term. This means that the average person in the UK will be poorer. Additionally, the tax burden is expected to soar to 42.9% of GDP by 2030, and public spending will reach 45.7% of GDP next year.

Healey's promise of "hope" rings hollow in light of these economic projections. Instead, the budget can be seen as a recipe for economic asphyxiation, with a heavy tax burden, a shrinking rental market, and an uncertain tax regime for banks and savers. The Chancellor's "breathing space" is more like a noose around the economy's neck.