UK wastes budget tax measures as trusses hang by threads

Mr Hunt estimates that tax changes will raise about £32bn ($36bn) a year after economists estimate the government is facing a £60bn black hole in finances. increase. He also warned about spending cuts.

In a televised statement, Mr Hunt said he was “reversing almost all the tax measures announced three weeks ago”, acknowledging that his predecessor’s last month’s budget had hurt the coffer. .

– Tax U-turn –

After April, the government will “review” the energy assistance package, he said.

The announcement comes at a time when polls show the Truss’ ruling Conservative Party underperforming amid 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.

His actions temporarily pushed the British pound higher to $1.1331 and sent bond yields lower.

– “Difficult decisions await”-

Truss had already made two humiliating budget U-turns, eliminating tax cuts for the wealthy and tax cuts for company profits.

“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,” he said on Monday.

Hunt had already warned that he would take nothing off the table amid speculation of painful cuts in key 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 say senior Conservative MPs have been stunned by the party’s performance since Truss took over on 6 September to replace scandal-stricken Boris Johnson and are plotting to sack Truss. reported.

rfj/bcp/rox

…

first published as UK wastes budget tax measures as trusses hang by threads