Liz Truss has ruled out calling early elections

The British economy is going through a delicate period, intensified by the presentation of the fiscal plan by Prime Minister Liz Truss last September. These “decisive measures”, she argues, will protect economic activity and stimulate growth.

The announcement has only generated controversy, market instability and even divisions within the party. The main criticisms relate to the benefits to the upper classes as society goes through a cost of living crisis, coupled with high public spending without a concrete plan on how to reduce the debt incurred.

The opposition leader, Labor Keir Starmer, called them “kamikaze”.

However, despite the bad repercussions, Truss ruled out early elections and assured that this is “the last thing the country needs”. The statement cost him a wave of boos this Wednesday in the House of Commons.

The prime minister’s announcement was given in response to Labor MP Matt Western, who asked if she was willing to give in to the people’s demands, citing a poll showing that more than half of those polled were in favor of early elections.

“I’m not sure how to measure a good honeymoon, but after five weeks of a crisis conceived in Downing Street, of falling pensions, rising interest rates, turmoil in the mortgage market and total financial chaos, the country has decided to divorce. . In two recent polls, 60% of this country wants immediate political elections, but the premier says he is listening. Will he give in to the public? ”, He scolded her.

That said, the president ruled out the initiative and again defended her plan, explaining that “we are making sure to protect our economy at this difficult time internationally.”

In the coming weeks, on October 31, Economy Minister Kwasi Kwarteng is expected to present his entire plan, which has already undergone changes shortly after it was implemented. Among them, portfolio managers were forced to backtrack on the measure that eliminated the marginal rate of 45% that was levied on incomes above £ 150,000 per year. This would have meant a loss of £ 2,065 million for the public purse over a five-year period.

For its part, the Bank of England (BoE) acknowledged that the Bank of England’s (BoE) “growth plan” – in which households and businesses are helped to pay their bills – “will probably reduce inflation in the short term” although they have he warned that “the rapid increase in the cost of financing mortgages and other forms of credit will weigh on British households and businesses”.

That is why, while the final announcement will maintain the proposed policy of avoiding public spending cuts, Downing Street admitted to being clear that “tough decisions will need to be made given some of the global challenges we face.”

End of the Bank of England intervention

On Wednesday, the monetary entity confirmed that it will end its bond market intervention at the end of this week, despite the tense climate that still persists and has generated a new hike in long-term government debt rates.

Similarly, 30-year bonds rose above five percent – a level that hadn’t been reached 20 years ago – and the 10-year government debt yield stood at 4.64% – a new high since 2008 -.

The intervention – whose effect, however, will last beyond October 14 – came abruptly and forcefully after Kwarteng’s announcement with the aim of containing inflation by nearly 10 percent year-on-year.

(With information from AFP and Europa Press)

Related