UK scraps ‘almost all’ budget tax cuts in truss humiliation

The UK government on Monday withdrew almost all of the debt-fueled tax cuts announced last month to avert new market turmoil, in a humiliating drop for beleaguered Prime Minister Liz Truss.

The shock move by new finance chief Jeremy Hunt, who took the job Friday to replace fired Kwasi Kwarteng, leaves Truss in a precarious position after a series of nasty U-turns.

The finance minister said no government can control the market, but stressed that his actions would give fiscal certainty and help secure growth.

“I want to be candid about the scale of the economic challenges we face,” he added, detailing the domestic and international headwinds facing the UK.

Hours ago, he acknowledged that last month’s budget from his predecessor had damaged public funds, using a brief televised statement to announce a dramatic reversal to a nervous market. rice field.

– U-turn –

From April onwards, his department will “review” its energy assistance package, he said.

The announcement comes at a time when the Truss’ ruling Conservative Party is on a rampage in the polls amid a reversal and a worsening cost-of-living crisis in the UK.

“No government can control the market, but every government can give certainty about fiscal sustainability,” Hunt added on Monday.

Last month’s infamous budget sent bond yields skyrocketing and the pound slumped to a record low against the dollar on concerns over plummeting UK debt.

Tax cuts from massive borrowing were central to last month’s ill-fated budget.

Hunt warned, “I fear that more difficult decisions will be made on both taxes and spending to meet our commitment to reduce the debt share of the economy over the medium term.”

Hunt had already said he wouldn’t get rid of anything amid speculation of cuts in areas such as defense, hospitals and schools.

Following earlier turmoil, the BoE has launched emergency purchases of UK government bonds. The policy ended on Friday.

British media have reported that senior Conservative MPs are plotting to sack Truss after being surprised by her short term.

The latest major U-turn on Monday comes after Truss was elected Tory leader on a tax cut platform analysts dubbed “Trasonomics.”

“People kept yogurt in their refrigerators longer than the tax cuts planned by the government,” she added.

But Labor, the largest opposition party leading the polls, said the ruling Tories were to blame for the “disruption and debacle”.


first published as UK scraps ‘almost all’ budget tax cuts in truss humiliation

UK scraps ‘almost all’ budget tax cuts in truss humiliation

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