LONDON, Oct 13 (Reuters)Britain’s debt mountain is likely to rise and hold above 100% of gross domestic product for at least the next few years but Prime Minister Boris Johnson should be in no rush to tackle it with tax hikes, a think tank said.

Public borrowing in 2020 will hit a level unseen outside the two world wars, thanks to the government’s 200 billion-pound ($260 billion) coronavirus spending surge and a 95 billion-pound hole in tax revenues, the Institute for Fiscal Studies said.

Britain’s public debt pile has already hit 2 trillion pounds, or just over 100% of gross domestic product.

The IFS said it was likely to stand at 110% of GDP in the 2024-25 financial year, the end of its forecast period.

“Without action, debt – already at its highest level in more than half a century – would carry on rising,” IFS director Paul Johnson said. “Tax rises, and big ones, look all but inevitable, though likely not until the middle years of this decade.”

Just to keep debt at 100% of national income, the government would need to raise taxes – or cut spending – by about 2% of national income in 2024/25, or 40 billion pounds.

The world’s sixth-biggest economy has weaker growth prospects than some of its peers because of the large share of jobs hit hardest by the pandemic and the drag from Brexit, according to analysts at bank Citi who worked with the IFS.

At the same time, demands for higher spending on healthcare are unlikely to fade.

Finance minister Rishi Sunak ripped up the economic orthodoxy of his Conservative Party by unleashing a wave of public spending at the onset of the pandemic.

He says his priority remains to slow rising job losses although he has replaced his

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Caps on excessive salaries should be introduced to save whole industries and redistribute wealth as coronavirus restrictions and changing habits cause large swathes of the economy to shut down, a progressive thinktank has urged.



a group of people standing in front of a sign: Photograph: Amer Ghazzal/REX/Shutterstock


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Photograph: Amer Ghazzal/REX/Shutterstock

In a landmark report, Autonomy highlighted the fact that incomes in the UK are the ninth most unequal of the 40 most developed countries, and called for the government to ensure existing resources were better managed to create a fairer economy amid growing poverty. The Bank of England predicts that unemployment will double to 2.5 million people by the end of this year.



a man holding a sign: Protesters supported by the PCS union demonstrate outside the Southbank Centre against job losses due to Covid-19.


© Photograph: Amer Ghazzal/REX/Shutterstock
Protesters supported by the PCS union demonstrate outside the Southbank Centre against job losses due to Covid-19.

A majority of the public – 54% – would support plans for a government-mandated maximum wage, a poll of more than 1,000 people by Survation suggested. Nearly 70% would support wage cap limits at either £100,000, £200,000 or £300,000.

Companies could afford to raise the incomes of 9 million low- and middle-waged workers if wages were capped for the top 1% of earners, who take home more than £160,000 a year, the report says.

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A minimum wage of £10.50 an hour could be implemented if a salary cap of £187,000 was introduced, it calculated. The “national living wage” – the UK’s minimum wage – is £8.72 an hour for those aged 25 and over.

In the arts, entertainment and recreation industries, hard-hit by Covid measures, the top percentiles earn vastly more than the bottom 95%. To provide every worker with a wage of £11 an hour, only 0.64% of earners – 2,000