Speaking to the BBC at the G20 summit in Indonesia, prime minister Rishi Sunak has said that higher tax and cuts to public spending will be required to get the economy back on a sustainable footing.
His comments come ahead of the Autumn Statement which is due on Thursday. It will see chancellor Jeremy Hunt announce the government’s plans to reduce inflation and public debt.
Hunt himself has already said that everyone will need to pay more tax as part of the plans. However, Sunak has reassured that decisions on tax and spending will be “fair”.
He also earmarked getting inflation under control as his “number one” priority, which would “limit” the rises in mortgage payments currently hitting homeowners following September’s mini-Budget which spooked the financial markets.
Sunak said: “Even though the situation is difficult…we will make those decisions balancing everything we have to.
“People can see that yes, the approach we've taken is fair, yes the approach we've taken is compassionate when considered in the round.
“Taking a step back, the number one challenge we face is inflation. It's important that we get a grip of that. It's important we limit the increase in mortgage rates that people are experiencing.”
The BBC reports that the plans to be revealed in the fiscal statement are geared toward raising £20 billion in tax and spending cuts of £35 billion.
It adds that likely inclusions will involve higher taxes on profits made from selling shares and second homes, while income tax could be frozen.
The BBC has also reported that ministers are considering allowing local authorities to increase council tax by over three per cent without having to put it to a local vote.
The PM has stopped short of commenting on specific elements of upcoming fiscal policy before Thursday, but hinted that pensioners are “at the forefront of my mind”. This could be a signal that pensions will rise in tandem with inflation in this week's announcements.
