Modest cuts in direct taxation, almost matched by increases in indirect taxes. Concerns about the UK economy and the French referendum on Maastricht send pound down to its bottom limit. As a result of departure from ERM, interest rates are cut significantly. Business failures ended the year at 62,767. Earnings growth well down, but unemployment peaked at over 3m in January, though fell to 2.81m by end of the year.
Balance of Payments switches to a new method of calculation.
Single market means that data can now longer be measured at border, and so has to be done from VAT information. This means information will only be available at 6 month intervals. Much of it recession, but by no means all. All designed to reassure markets, but not make the recovery falter. Outlook for PSBR looked even worse in December 1993, so Kenneth topped even these tax increases making them the largest ever peacetime tax increases - equivalent to 7p on income tax.