In an effort to end ‘Treasury orthodoxy’ and promote growth, Prime Minister Liz Truss will present a package of tax cuts, energy subsidies, and planning reforms totaling nearly 200 billion pounds ($225 billion) on Friday. This is according to Kwasi Kwarteng, the new finance minister of the United Kingdom.
Campaigning against tax increases that Sunak had planned in the wake of the COVID-19 outbreak helped Truss defeat former finance minister Rishi Sunak for the position of Conservative Party leader and, with it, the position of prime minister.
Kwarteng will submit the new government’s agenda to parliament at roughly 9.30 a.m./0830 GMT after a delay brought on by the death of Queen Elizabeth, which occurred only hours after Truss outlined a pricey scheme of subsidies to address skyrocketing energy costs.
After Kwarteng concludes his address, the United Kingdom Debt Management Office will announce new borrowing plans, giving financial markets an early price tag for the proposals.
The environment on the market is incredibly unfavourable to Kwarteng. On Thursday, the value of the pound against the dollar hit its lowest level since 1985, while the price of British government bonds plunged by the most in a single day since the outbreak.
Markets have been in a tailspin as a result of the U.S. Federal Reserve raising interest rates quickly to combat inflation. However, some investors are concerned about Truss’s willingness to take on significant debt in order to fund growth.
At a time when it is facing inflation that is approaching a 40-year high, the Bank of England stated on Thursday that Truss’s energy price ceiling would restrain inflation in the immediate term but that government stimulus was expected to exacerbate inflation pressures further out.
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