“The UK will always pay,” said Hunt in an emergency statement to reverse taxes and austerity
Britain’s new Chancellor of the Exchequer, Jeremy Hunt, has announced the abolition of all the tax cuts and withdrawals proposed three weeks ago by his predecessor that are now out of Parliament, and the limitation of the subsidy system to consumer energy prices until April. “The UK will always pay,” he said in an “emergency statement”.
Hunt’s announcement is another step in an accelerated fiscal policy reversal by Prime Minister Liz Truss and her former Finance Minister Kwasi Kwarteng to boost growth. Following the financial turmoil caused by his package, it was already announced on Friday that Kwarteng would be fired and that the tax increase on corporate profits would be maintained.
The capital markets have rewarded Hunt’s speed with a rise in sterling and bond prices, meaning in this case a lower cost of debt. This Monday marks the first day for the bond market to operate without the Bank of England’s buying program, which has been deployed to avoid dynamic buying and selling spirals.
The time limit for the energy cost subsidy is another consequence of Truss’ impulsive personality, which went from rejecting the idea of subsidies during the campaign to replace Boris Johnson to presenting a universal ‘guarantee’. to all consumers, regardless of their income, that the annual costs for an average household over the next two years will not exceed EUR 2,900. The possible costs were estimated at around 170,000 million euros.
The government’s new fiscal policy will be presented more fully in two weeks, but Humts has set out to calm relations with the Bank of England and the markets. It is also Truss’ job to please the parliamentary group, which ranges from those outraged by his treatment of the first forty days of his mandate who want his resignation, to those who recommend calm, unity and the British politics in a new whirlwind.
The prime minister, whose power is currently fragile, will meet with deputies. Its spokesmen have emphasized that its diplomacy with co-religionists will include members of the current ‘One Nation’ party, who are grouped around the idea of moderate management. Truss is identified with the so-called “party law”. They are more economically liberal and nationalistic.
Source: La Verdad
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