No more tax cuts for the rich, Liz Truss’s last swerve after the earthquake on the stock market

Liz Truss backs off. Ten days after the announcement of one controversial fiscal maneuverthe British government has decided not to proceed with the elimination of the maximum rate of 45% sui higher incomes. The measure was part of a larger package, from 45 billion pounds, which last week caused panic in the financial markets and sent the price of the British currency to a peak. According to Kwasi Kwarteng, Minister of Finance, the cut in taxes on the highest incomes “has overshadowed our mission to tackle the difficulties of our country. For this reason, I tell you that we will not carry it outKwarteng tweeted. “We understood, we listened. This will allow us to focus on implementing the key elements of our growth plan. First, the ceiling on energy prices“.

Truss’ backtracking and fear of the markets

Truss’s second thoughts, in reality, are more than that symbolic. Tax cuts for incomes beyond 150 thousand pounds they only weighed 2 billionon 45 totals allocated by the UK government. The measure, however, had unleashed a wave of popular indignation, since, in a context of severe economic difficulty, it favored only the richest segment of the population. Otherwise, Liz Truss’s plan against expensive energy remains intact. Starting from tax relief, an essential goal for the conservative prime minister. What triggered the financial crisis, and the discontent within your own party, was however another factor: this massive tax cut will be financed by resorting to further debt. A strategy that, in a context of high inflation, has raised some doubts on the financial markets. The pound plunged to an all-time lowwhile UK government borrowing rates have reached their highest level since crisis of 2009forcing the Bank of England to intervene to stabilize rates.

The political debate, then, he did the rest. An increasingly important slice of the Tories began to hypothesize one distrust by Liz Truss, who took office in Downing Street just a month ago. In fact, polls show a significant decline in the popularity of Conservatives and, consequently, an increase in preferences for Labor. In an interview with Bbc aired this morning, Minister Kwarteng has firmly ruled out the possibility that he or the premier they resign. The change of course announced in these hours by the British government seems to have already had its first effects. THE government bond rates they returned to go down. The 10-year yield drops 8 points to 3.99%, while the 30-year yield drops to 3.76%.

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About Banner Leon

Videogames entered his life in the late '80s, at the time of the first meeting with Super Mario Bros, and even today they make it a permanent part, after almost 30 years. Pros and defects: he manages to finish Super Mario Bros in less than 5 minutes but he has never finished Final Fight with a credit ... he's still trying.

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