Home Business Mini-budget UK triggers flurry of sterling and gilt sales. Kwarteng announces maxi-tax cut

Mini-budget UK triggers flurry of sterling and gilt sales. Kwarteng announces maxi-tax cut

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The mini-budget unveiled today by the new Chancellor of the Exchequer, Kwasi Kwarteng, is triggering sales on UK assets with pound and Gilts in trouble and Ftse 100 at two-month lows. Ing analysts speak of ‘perfect storm’ on UK assets as markets are jumping to the conclusion that the BoE will have to respond in the same way with even higher rates. “The pound has had another wild ride on today’s fiscal event, initially up on the biggest fiscal cut since the 1980s, but subsequently plunging sharply as the UK gilts market reacted to the prospect of a new heavy. list of debt issues “, remarks Ing.

The new government’s mini-budget includes tax cuts and other business-friendly measures. In detail, it foresees that the higher rate of income tax will be abolished, while the basic rate will be reduced to 19% from next April. The maximum income tax rate was 45% for earnings over £ 150,000. “This means that we will have one of the most competitive and progressive income tax systems in the world,” explained Kwarteng.

Kwarteng said Britain will spend around 60 billion pounds ($ 67 billion) to subsidize gas and electricity bills for the next six months for households and businesses.

Union leaders condemned the mini-budget as “A budget for the rich”. Unite Secretary General Sharon Graham said it’s a budget for the rich, big business and the City. Unison Secretary General Christina McAnea said it was “an all-out offensive to make the rich even richer,” adding: In the midst of a huge cost-of-living crisis, this is not the time. for economic experiments destined to fail. There are masses of essential jobs that need to be filled. The best way to manage 300,000 vacancies in the healthcare sector is to offer staff a salary increase that exceeds inflation. “

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