The New Finance Minister Of The United Kingdom Has Warned That Some Taxes Will Go Up As A Result Of The Recent Policy U-turn

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Last Updated on October 15, 2022 by Bitfinsider

Jeremy Hunt, Britain’s new finance minister, stated on Saturday that some taxes will need to go up, signaling another abrupt policy U-turn by Prime Minister Liz Truss who is fighting to save her leadership just over a month into her term. Truss took office just over a month ago.

On Friday, Truss removed Kwasi Kwarteng as her chancellor of the exchequer in an effort to calm the turmoil that has been roiling the financial markets for the past three weeks. She also rescinded portions of the contentious economic package that she and Kwarteng had developed together.

Truss announced in a hastily called news conference shortly after she fired Kwarteng that the corporation tax rate would increase, abandoning her plan to maintain it at the current levels, and that government spending would rise by less than was originally planned.

Although Hunt indicated that there was a possibility of tax hikes, one of the central tenets of the original plans proposed by Truss was significant tax reductions that were not funded.

He told Sky News that in the coming days, “we will have some very difficult decisions to make.”

According to Hunt, “Stability is the one thing that people want, the markets want, and what this country needs right now.” No chancellor has ever been able to exert control over the markets. But what I can do is show that we can pay for our tax and spending plans, and in order to do that, we are going to need to make some very difficult decisions regarding both spending and taxes.

The medium-term budget plans of the government are scheduled to be announced by Hunt on October 31. This will be an important test of the government’s ability to demonstrate to investors that it can restore its economic policy credibility.

He stated that there would not be as much of an increase in spending as people would like, and that all government departments would have to find more efficient ways of doing their work than they had planned.

It is possible that some taxes will be raised while others will not be reduced as quickly as the public would like. Therefore, it’s going to be a challenge,” he stated.

The fiscal statement that Kwarteng released on September 23 triggered a violent reaction in the financial markets. The reaction was so severe that the Bank of England was forced to take action in order to prevent pension funds from becoming entangled in the mayhem caused by the spike in borrowing costs.

Hunt stated that he agreed with Truss’s basic strategy, which was to try to stimulate economic growth, but that the approach that she and Kwarteng had taken had not been successful.

“There were a few blunders. “It was a mistake when we’re going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest,” he said. “It was a mistake because we’re going to be asking for difficult decisions across the board on tax and spending.”

“It was a mistake to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up. Flying blind was a mistake.” That fact has been brought to the attention of the prime minister, which is why I am here today.

Truss was scheduled to spend the weekend attempting to shore up her dwindling support within the Conservative Party. The newspapers had been quoting lawmakers who questioned her ability to continue in her role, and these lawmakers were expected to question Truss’s ability to continue in her role.

The emergency buying support that has been provided by the Bank of England (BoE) since September 28 will be removed from the British government bond market on Monday, which will be the first time that it will be put to the test. After Truss’s news conference on Friday, the price of gilts dropped significantly later in the day.

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