Government refuses to rule out more tax increases next year after figures show the economy was flatlining

THE Government yesterday refused to rule out more tax increases next year after figures showed the economy was flatlining.

Ministers were accused of talking the country towards a recession — with zero growth from July to September.

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Chancellor Rachel Reeves could be forced into a fresh tax raid to shore up the nation’s finances[/caption]

Economists warned there is a risk the UK economy could even have shrunk in the final three months of the year.

And the Institute for Fiscal Studies said Chancellor Rachel Reeves could be forced into a fresh tax raid to shore up the nation’s finances.

IFS boss Paul Johnson said: “It’s not impossible that the Chancellor will feel she needs to come back for yet more money next autumn if the economy doesn’t pick up.”

Earlier this month, the PM refused to rule out further tax increases despite £40billion of tax rises since the election in July — saying that events such as the pandemic could change circumstances.

Following the disappointing economic figures, his spokesman again declined and said: “The Government is now focused on getting growth in the economy that delivers for working people that they feel in their pay slips.”

Shadow Business Secretary Andrew Griffith said: “Labour have killed, plucked and cooked the UK economic goose”.

He added it had been a “summer of trash-talking the economy, an autumn tax-hiking budget and now a winter of discontent with a recession a distinct possibility”.

Liz McKeown, of the Office for National Statistics, said the economy was weaker than previously suggested as people cut back on nights out and advertising spend also fell.

Living standards were also lower than expected with GDP per head falling 0.2 per cent.

Chancellor Rachel Reeves said the figures showed the “challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge”.