Kwasi Kwarteng, Britain’s under-fire finance minister, defended his divisive mini-budget that caused market turbulence and pledged to present “a viable strategy” to reduce government debt

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Last Updated on October 2, 2022 by Bitfinsider

The contentious tax-cutting proposals from last month went further than many had anticipated, eliminating the top rate of income tax and easing a bar on bankers’ bonuses. These plans will significantly increase government borrowing.

The financial markets experienced an immediate upheaval as a result, and the pound fell to its lowest level in relation to the dollar.

Kwarteng claimed that his ministry will present a “medium-term fiscal plan” the next month that will outline a strategy for lowering borrowing along with “new fiscal norms and a commitment to spending control.”

He also mentioned that on November 23 the plan would be accompanied by a comprehensive prediction from the nation’s fiscal watchdog, the Office for Budget Responsibility (OBR).

The market turmoil that followed the publishing of the mini-budget on September 23—which lowered taxes for the wealthiest people despite a cost-of-living crisis—has been attributed in part to the absence of an OBR prediction.

Fears of a collapse in UK pension funds prompted the Bank of England to act urgently in order to stabilize the situation.

The ideas have been criticized as being risky and ineffective by opposition parties, independent analysts, and even some Tory lawmakers.

But Kwarteng has emphasized that the package is necessary to bring back economic growth to the UK, which is predicted to enter a recession soon.


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