Germany plots €23bn of tax cuts to help struggling households

Unlike in Britain, income tax thresholds in Germany are not automatically raised in line with inflation, but the government has opted to do so to undo the effects of fiscal drag.

In the UK, the reverse has happened. Although the thresholds would normally rise in line with inflation, they have been frozen until 2028-29. Combined with high levels of inflation, this means an extra 3.7 million people will pay income tax who would otherwise not have done, according to the Office for Budget Responsibility…