UK Chancellor of the Exchequer rules out nearly all ‘mini-budget’ for Truss

First Amendment:

Jeremy Hunt, Britain’s new chancellor, scrapped Prime Minister Liz Truss’s economic plan and cut energy subsidies, a huge shift in fiscal policy to try to restore investor confidence.

On September 23, UK Prime Minister Liz Truss, and her former Finance Minister Kwasi Quarting, announced unfunded tax cuts of £45 billion, causing a historic drop in the pound against the dollar and causing an uproar in financial markets. That required the intervention of the Bank of England to contain the damage.

On Friday, Truss had Kwarteng resign to appoint Hunt, which today, October 17, reversed all the policies that had helped Truss reach the premiership less than six weeks ago.

“I remain very confident in the UK’s long-term economic prospects as we deliver on our mission of betting on growth,” Hunt said in a televised video. “But growth requires confidence and stability, and the UK will always drive its own way,” he added.

Hunt said the planned tax cut changes would raise £32 billion, about $36 billion each year. After the announcement, the British pound rose 1.4%, hitting a session high of $1.1332.

“We have taken steps to chart a new growth path that will support people across the UK,” Truss responded on Twitter, saying he was charting a new growth path.

Hunt was quick to reverse policies and found spending cuts to calm markets and prevent borrowing costs from continuing to rise on Monday, but 10-year Treasury yields remained around 46 basis points. Above the closing level on September 22, the day before the growth plan “surprised markets” .

See also  Six months in prison for the former Paralympian who crashed a plane in the UK

Truss’s spokesman was asked how the prime minister could retain any credibility after rolling back a program that ensured she would be elected by party members.

He replied, “He is making the difficult and necessary decisions to change our focus so that we can provide economic stability and maintain leadership stability which is also important.”

Now many lawmakers are in favor of leaving office. The opposition Labor Party’s finance spokeswoman, Rachel Reeves, said the Conservative government could no longer provide stability.

The new finance minister will present a comprehensive medium-term fiscal plan on October 31, along with forecasts from the Independent Office of Budget Responsibility, according to the Treasury.

with Reuters

Leave a Reply

Your email address will not be published. Required fields are marked *