U.K. must raise taxes and cut spending, Jeremy Hunt says ahead of budget

Britain’s Finance Minister Jeremy Hunt said he did not want to aggravate an expected recession but he had to show he could lower a budget deficit

Britain’s Finance Minister Jeremy Hunt said he will set out tax rises and spending cuts this week to show Britain can fix its public finances and restore its economic credibility after financial market chaos sparked by former Prime Minister Liz Truss.

But he said poorer households should be spared much of the pain and cuts to public services would be balanced.

Speaking before announcing a budget plan on Thursday, Mr. Hunt said he did not want to aggravate an expected recession but he had to show he could lower a budget deficit which has soared after the COVID-19 pandemic and Russia's invasion of Ukraine.

"You don't want to do things that make any recession that you may be in worse," Mr. Hunt told Sky News on Sunday.

"But on the other hand, if you do nothing, if you don't show that we're going to bring our debt down ... interest rates get higher and you get a recession that's made worse."

After a bond market rout triggered by a string of unfunded tax cuts in Truss's "mini-budget" in September, Mr. Hunt and Prime Minister Rishi Sunak have warned they will take tough decisions at a time when 10% inflation is already squeezing households.

"We're all going to be paying a bit more tax, I'm afraid," Mr. Hunt said.