Economics
U.K. Set for Tax Hikes as Bigger State Seen Outlasting Covid
- IFS think tank warns on difficult choices facing Chancellor
- Outlook highlights major political shifts wrought by virus
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The U.K. could be facing a long-term increase in the size of the state as well as a substantial tax increase as a result of the coronavirus pandemic, according to the Institute for Fiscal Studies.
The influential research group said Tuesday it is “highly plausible” that government spending is around 45% of gross domestic product by the middle of the decade, a level not sustained since the 1970s.
The prospect of a significant enlargement of the state underscores the major political shifts brought about by the pandemic.