Experts have predicted that the little island will overtake Britain in the coming years.
Rachel Reeves’s critics say her policies are making Brits poorer (Image: Getty)
Brits are to be poorer than people living in a tiny EU country as Rachel Reeves’s tax raids hit the economy, experts have warned. Living standards in the UK are forecast to dip below those in Malta, the small Mediterranean island where the late Queen Elizabeth II lived with Prince Philip between 1949 and 1951 before ascending to the throne, by 2035, according to the Centre for Economics and Business Research (CEBR) yearly league table of economies.
Growth in GDP per capita will be the second weakest in the G7 in Britain over the next half decade, experts predict, behind other large economies like the US, France, Canada, Germany and even Italy. The Chancellor is facing three main challenges, Pushpin Singh senior econimist at the CEBR said: high inflation, high debt and low growth.
States with lower taxes and less red tape were harming the UK’s competitiveness, he added.
Malta could enjoy higher average living standards than the UK in the coming years (Image: Getty)
The latest data suggests that, by 2035, Malta’s GDP per capita is expected to have risen to $77,578 (about £57,400), flying past the UK at $75,478 (about £55,900).
“In some ways Britain is still very much living off its past glories,” Mr Singh said, The Telegraph reports.
“If you look at the short-term dynamics, the build-up to the latest Budget handicapped the UK economy for at least the last six months or so, simply because there was a lot of pessimism regarding which additional taxes would come into place.”
Trikcy decisions are likely in store for the Chancellor, as the UK is expected to pay £100billion a year in debt interest by 2030.
Sir Keir Starmer has promised to raise living standards this parliament.
In November, Ms Reeves insisted taxes have been kept at “an absolute minimum on ordinary working people.”
Her plans also included a new pay-per-mile tax for electric vehicles, increased taxes on online betting and a so-called “mansion tax” on homes worth more than £2million.
Moreover, salary sacrifice pensions will be taxed, and the cash ISA limit is to be reduced to £12,000 from April 2027.
