UK financial problems spur tax increase expectations — Barclays

The UK government is facing growing financial challenges that will require tax increases in the autumn budget. This was reported by conglomerate Barclays in its research note.

Due to recent political developments, the kingdom's fiscal position has deteriorated. This, in turn, has led to a revision of the welfare reform and an increase in government spending by 4.8 billion pounds ($6.53 billion) by the 2029–30 fiscal year.

The nation's economic data showed GDP growth of 0.7% quarter-on-quarter. Meanwhile, household consumption also rose — reaching 0.3%.

Final June PMI data reflects modest improvement at the quarter's end. The composite PMI index was revised upward to 52.0 points compared to the flash estimate.

Simultaneously, the labor market shows signs of weakening. Barclays' alternative employment indicator points to a reduction of 27,000 jobs in May.