Everyone in Briton will need to pay more in tax in the coming years to fix a hole in public finances, a source in the finance ministry said on Monday, following a meeting between Prime Minister Rishi Sunak and finance minister Jeremy Hunt.
Hunt is due to present a fiscal statement on Nov. 17 which will be accompanied by the first growth and borrowing forecasts since March from Britain's Office for Budget Responsibility.
"It is going to be rough. The truth is that everybody will need to contribute more in tax if we are to maintain public services," a Treasury source said.
"After borrowing hundreds of billions of pounds through COVID-19 and implementing massive energy bills support, we won't be able to fill the fiscal black hole through spending cuts alone," the source added.
Sterling fell to a record low against the U.S. dollar and the Bank of England was forced to intervene in the bond market in the days after Hunt's predecessor Kwasi Kwarteng set out 45 billion pounds of unfunded tax cuts on Sept. 23.
The debacle led to Liz Truss resigning as prime minister and being succeeded by Sunak, who had earlier lost out to her in August's Conservative Party leadership election, partly because he was less keen to promise immediate tax cuts.
Britain's economic prospects have dimmed since March due to surging inflation, weaker growth and higher borrowing costs.
Economists estimate the government will still have to find tens of billions of pounds of savings or tax rises over the medium term to keep the public finances on an even keel, even if Truss and Kwarteng's tax cuts are fully reversed.
