LONDON, March 25 (Xinhua) -- British Chancellor Rachel Reeves faces mounting skepticism from businesses and experts as she prepares to deliver her Spring Statement, or "mini budget," on Wednesday.
The "mini budget" is aimed at tackling economic stagnation in the United Kingdom (UK). However, experts have warned that with industry reeling from rising taxes, global trade tensions, and fears of austerity-driven public sector cuts, the Chancellor's proposed plan risks deepening uncertainty unless it balances fiscal restraint with growth-focused relief.
UK businesses are bracing for a "triple threat" of higher national insurance (NI) contributions, an elevated minimum wage, and possible further tariffs to be imposed by the United States in the coming week.
Shevaun Haviland, director feneral of the British Chambers of Commerce, called for immediate action: "Businesses are feeling battered and bruised by the heavy cost pressures looming within days. The Chancellor must use her Spring Statement to offer some respite."
Highlighting that 82 percent of firms expect the NI hike alone to strain operations, she added: "Businesses are key to getting the economy out of its current growth rut. The Chancellor needs to pull every lever possible to get firms investing, recruiting, and exporting."
A proposed 2 billion-pound (around 2.59 billion U.S. dollars) reduction in Whitehall spending, potentially eliminating 10,000 civil service jobs, has prompted warnings from economists.
Professor Ian Scott at the University of Manchester told Xinhua: "The cuts to Whitehall are meant to offset decreases in welfare payments, in some cases to the most vulnerable in society. The mask to that policy is that it's about helping people back into work - but the effects are likely to fall on those who legitimately cannot work for health and/or other reasons."
While the government argues that the cuts create fiscal "headroom", Scott questioned their efficacy: "Does this help economic growth? Only if it gets invested in the right places elsewhere. Does it aid public service delivery? If it's shown that even a proportion (of the cuts) are needed, then public service delivery as well as execution is under threat."
Meanwhile, Professor John Bryson from the University of Birmingham criticized the UK's "inefficient and cumbersome administrative bureaucracy" but warned against conflating job cuts with reform.
"Trade unions argue front line services will be cut. No such cut should happen if the focus is on productivity and administrative efficiency," he told Xinhua.
Bryson also blamed recent Labour policies for stifling growth: "The October 2024 budget targeted job makers with higher taxes, dampening investment. Now, stagflation -- inflation combined with low growth -- looms if borrowing isn't controlled."
Bryson warned that external pressures, including revived U.S. tariffs on steel and aluminum, could potentially have a significant effect on the UK.
"Steel is clearly indirectly affected, but it is what happens to food and consumer goods which will deeply affect small to medium businesses," he noted.
As Chancellor Reeves finalizes her statement, businesses, unions, and economists await a plan that reconciles austerity with growth. Will it offer firms a lifeline, safeguard public services, and insulate the economy from global shocks -- or exacerbate the UK's fiscal and political divides? The answer may shape Britain's economic trajectory for years to come. (1 pound = 1.29 U.S. dollars)
