British officials are debating how to overturn Prime Minister Truss’s grand tax cut plan. The unfunded plan has come under increasing pressure from the financial markets and within the ruling Conservative party to restore economic credibility.
Officials from the Prime Minister’s Office and the Ministry of Finance are working on options to be presented to the Prime Minister, but no final decision has been made on the change of direction, said the people, who asked not to be identified because the discussions are private. Officials are also awaiting the return of Finance Minister Quarteng from Washington, where he is attending an International Monetary Fund (IMF) meeting, they said.
The pound rose 1.8% against the dollar to $ 1.1295 per pound. The government bond market continued to grow and the 30-year bond yield temporarily dropped 46bps to 4.36%.
Sterling and UK bonds rise as Britain works to transform tax cut plan, officials say
One proposal that is being considered for withdrawal is a proposal to freeze next year’s corporate tax rate hike. Under the strategy outlined by the previous Conservative government, the corporate tax rate was to rise from the current 19% to 25% in April next year, one of the pillars of the financial package announced on the same day.
But the package shook markets, pushing the pound to an all-time low against the dollar and forcing the Bank of England to step in to prevent a collapse in bond markets.£ 60 billion(about 9.9 trillion yen).
The administration has already backtracked from lowering the maximum income tax rate as part of its tax cut plan, but there are many other changes to be made, such as corporate tax.
Original title:UK officials are working on a U-turn for the tax cut plan on Truss (1)、UK officials are working on a turnaround for Truss’s tax cut plan(extract)
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