A leading UK economist has said there’s a ‘significant risk’ of fresh tax rises.

RSM UK’s economist Thomas Pugh was speaking ahead of an exclusive business breakfast in Liverpool next week the firm is hosting alongside NatWest and BusinessCloud.

Speculation of tax hikes was growing even before this week’s announcement by PM Keir Starmer of a significant rise in defence spending.

Pugh, who will be speaking at the exclusive event at Liverpool’s Hope Street Hotel on June 12th, said: “I think there’s quite a significant risk of more tax rises on the way.

“The Chancellor Rachel Reeves left herself a very small amount of headroom, which given movements in interest rates since the last fiscal statement, has probably got even smaller.

“Given the choices that we’ve seen previously, if there’s a fiscal consolidation that needs to be done, I think it’s more likely we see tax rises than spending cuts.”

Navigating change: the impact of recent political shifts on the UK and global TMT landscape

The business breakfast on June 12th will look at the impact of recent political shifts on the UK and global TMT landscape and will also hear from NatWest’s Head of Technology, Media and Telecoms, Neil Bellamy.

Pugh, who graduated from the University of Manchester before going to work for HM Treasury, said the Government’s decision to increase the National Insurance rate was damaging.

“Coming into the 2024 General Election the hopes were quite high,” he said.  “All of the economic narrative was the right one.

“I think the decision to raise National Insurance was probably the wrong one.  I think it’s a damaging tax. I think there are better ways they could have raised that money.

“There’s clearly a lot of fiscal pressure now that the Government are going to have to deal with.

“The risk is that we end up with a series of tax hikes, which become increasingly damaging to the economy.”

Labour pledged in their manifesto not to raise income tax but Pugh said this would have been better than hiking up National Insurance.

“Economically that would clearly have been a much better way of raising that kind of money,” he said.

Other speakers at next week’s event include Helen Cross, Digital and Creative Sector Lead at Growth Platform; Scott Robertson, co-founder of Haulage Hub; and Dean Ward, co-founder of Evoke Creative.

You can register for the event here

If you have any questions about the event please contact Kirsty Fraser.