- Neil Prothero, deputy chief economist at EEF
With only 13 months left before the elections, Britain's politicians will try to do whatever it takes to convince their electorate they are able to lead the economy to a long-term prosperity. George Osborne in particular is trying to rebut critics within his own party that blame him for not making enough tax cuts and providing support for the middle-class voters.
In attempt to regain the lost confidence, Osborne claimed that the upcoming tax cuts mark the return of stability and confidence in the U.K., bolstering the case the economy will continue building up steam. The reforms include a 1% reduction to the corporation tax that will be revised to 21%, while in 2015 it is set to be reduced to 20%. Such a privilege became possible amid stronger investment and reductions in business rates. At the same time, Osborne will be under scrutiny from the Labour, who claims he ignored the constantly increasing cost of living.
Osborne also pledged to fight for the full employment, making job creation a key pillar of the government's economic plan. These comments echoes with the central bank's aim to eliminate the remaining slack in the economy that will allow Carney to start raising interest rates. A growth in wages and productivity were earlier claimed the main priorities for the Bank of England.
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