Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.
His comments came as the organization upgraded its forecasts for economic growth, saying GDP in Scotland could rise by 0.9% in 2024 – up from the 0.7% it had forecast in June.
Its latest economic commentary, sponsored by Deloitte, said this change “reflects the modest economic improvements seen in recent months”.
READ MORE:
But the report added: “Despite the near-term optimism, the projections for 2025 and 2026 remain unchanged at 1.1% and 1.2% respectively.”
It found that economic growth in 2024 had been “more sustained than the stop-start pattern we saw in 2023” – with the report stating that Scottish growth figures of 0.6% for the first three months and 0.5% on for the period April to June is “much stronger than in recent years and slightly behind the UK”.
But he added that economic growth in May and June had been “close to zero”, followed by a rise of 0.3% in July.
Meanwhile UK data for July “suggested that the economy is flattening”, with researchers saying this could mean “it may be difficult to sustain sustained growth for the rest of the year”.
Rachel Reeves is expected to set out her tax and spending plans at the end of the month.
She and the First Minister have already warned in an attempt to tackle what they say is a £22bn black hole in the public finances, that the budget will be “painful” and “that things will get worse before we get better.”
Earlier this week, it emerged that the Chancellor had asked her colleagues to draw up plans for billions of pounds in cuts to infrastructure projects over the next 18 months.
The Guardian said that cabinet members have been asked to model cuts to their investment plans of up to 10% of their annual capital expenditure.
The budget on October 30 is expected to include a number of other spending savings, as well as a series of tax increases.
The new Labor government blames the Rishi Sunak administration for a number of unfunded commitments.
However, the Tories say Keir Starmer has spent a staggering amount on resolving public sector pay disputes, accounting for as much as £9bn of the shortfall.
READ MORE:
Professor Spowage said: “The new Chancellor Rachel Reeves has set out her views on their financial legacy and the difficult decisions that may need to be made in order to, as they would see it, restore economic stability.”
Professor Spowage added: “The rhetoric around this has the potential to undermine business and consumer confidence and contribute to the declining economic performance over the summer.”
But he added: “It’s always difficult to say that definitively – the economy is a dynamic organism rather than a predictable mechanism.
“Many businesses may wait to see what is in the Budget on October 30 to have the confidence to grow and invest.”
Meanwhile, Douglas Farish, head of Scottish tax at Deloitte, highlighted the “understandable uncertainty” among the public and private sectors ahead of the UK Budget and Scottish Budget, which will take place just over a month later on December 4.
Mr Farish said: “With the country facing economic challenges and financial constraints, bold public service reform is not only desirable – it is essential to improve the way public services are delivered.
“As we approach the UK Budget in October and the Scottish Budget in December, there is understandable uncertainty across the public and private sectors.
“In the midst of these challenges, businesses and communities will be looking for stability and a clear path forward.
“It is imperative that these announcements deliver thoughtful and decisive reforms that address today’s fiscal pressures, creating a more efficient and resilient public sector that can help navigate these economic headwinds while facilitating sustainable, long-term growth.”
A UK Government spokesman said: “The Chancellor has been clear that the reward for bringing stability to our economy is investment and well-paying jobs, which is why next month’s Budget is about laying the foundations of our economy, so that we can deliver on the promise of change.
“We are committed to working with the Scottish Government on our shared priority to boost economic growth so that we can make all parts of Scotland better off.”
(Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.)
source link https://www.heraldscotland.com/news/24628814.chancellors-tough-budget-rhetoric-may-stall-growth/?ref=rss
