- British Prime Minister Liz Truss is set to roll back her tax policy, reversing some of the recently announced tax cuts.
- He also sacks his finance minister Kwasi Kwarteng. Former Secretary of State Jeremy Hunt becomes Chancellor of the Exchequer.
- The Prime Minister refused to step down. He acted decisively and ensured the financial stability of the country.
It’s clear some parts of his mini-budget are “much faster” than markets expected, Truss said at a news conference in London on Friday. “We need to act now to convince the markets of our fiscal discipline,” Truss continued.
The announcement of the massive tax cut had earlier sent shockwaves through the financial markets. Corporate tax is now due to rise from 19 to 25 percent in April, as the previous government had planned, Truss said. She wants to grab other tax breaks for now.
The conservative politician had earlier sacked his finance minister Kwasi Kwarteng. He accepted it and resigned, sharing the quartet Twitter with.
He has been blamed for the recent turmoil in financial markets, stemming from debt-financed tax cuts and higher spending to lower energy prices. Observers see Quarteng’s dismissal as an attempt by Truss to save his own political career.
Truss is reluctant to resign
The British Prime Minister is under increasing pressure over his controversial fiscal policy. Five weeks after taking office, he is already considered politically vulnerable. Polling firm Ipsos determined that only 16 percent of Britons were satisfied with Truss – the worst rating ever for a prime minister.
However, Liz Truss refused to give up on herself. He acted decisively and thus ensured the country had financial stability, the conservative politician insisted to the media on Friday. Truss said he will always work for the good of the nation. “We will weather this storm.”
The head of government insisted that his policy of low taxes and high investment incentives was the right one. Truss said the only reason he’s talking about about-face is the market, which has been irritated by decisions to significantly cut taxes. “I am determined to deliver what I promised.”
A critic of the government becomes the finance minister
Truss appointed former Foreign and Health Secretary Jeremy Hunt as New England Treasury Secretary. The former chairman of the health committee in the British Parliament had applied for the Conservative leadership post in the summer, but lost after a few ballots. During the pandemic, the 55-year-old has been one of the government’s fiercest critics.
It is questionable whether the truce will be able to calm the financial markets and stabilize their position through the sacking of the finance minister and the economic turnaround. The British media is already speculating that his party may soon oust him.
Thus Great Britain was thrown into a crisis of government
The background to the government crisis in Great Britain was the sharp reaction of financial markets to the tax cuts announced at the end of September with no plans for counter-financing. The pound fell against the US dollar. The Bank of England has had to step in and buy government bonds on several occasions to prevent their prices from collapsing and pension funds from collapsing. Rising interest rates on real estate loans have compounded the crisis for many homeowners.
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