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No need for further tax rises after promising GDP figures, says IEA expert

Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, commented on the latest GDP figures, published by the ONS today 

“The growth of 0.4 per cent in the UK economy in August may not sound like much but, when combined with revisions to previous data, it means that GDP was only 0.8 per cent below where it was in February 2020.

“Output therefore remains on track to return to its pre-Covid level within a few months, which would be much sooner than most had expected at the start of the year. Indeed, payroll employment is already higher than it was before the pandemic.

“The rebound in economic activity will help to repair the public finances without the need for any more tax increases, but also makes it increasingly hard to justify keeping interest rates at the emergency low of 0.1 per cent.

“With labour shortages and rising prices now the biggest threat, the focus needs to shift to tackling problems on the supply side. The emphasis should be on letting markets work properly, rather than further state intervention and pumping even more money into the economy.”

Notes to editors

Contact: Emily Carver, Head of Media, 07715942731

IEA spokespeople are available for interview and further comment.

GDP monthly estimate, UK: August 2021

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