Britain’s new Finance Minister Jeremy Hunt announced that almost all of the tax measures announced on September 23 will be canceled
Jeremy Hunt, the new Finance Minister of the UK, announced that almost all of the tax measures in the growth plan announced on September 23 will be canceled.
Hunt announced that tougher decisions will be taken on tax and spending.
Stating that the income tax rate will remain at 20 percent indefinitely, Hunt said, “The government is making further changes to the mini-budget. I will make a statement in parliament later today.”
Hunt stated that thanks to the changes to be made in tax cuts, 32 billion pounds of resources will be created every year, and public spending will also be cut.
Hunt stated that the energy price guarantee will not change until April and the plan to freeze the alcohol tax will be canceled.
Bond sales will continue next week
On the other hand, the Bank of England (BoE) announced that it plans to resume corporate bond sales next week as a normalization step.
The BoE had suspended bond sales after the economic package announced by the Liz Truss government caused sharp losses in UK bonds.
BoE’s corporate bond sales will be held on October 24. Active government bond sales will also resume on October 31.
A sharp decline in bond yields
After the announcements, the 20-year bond yield in the UK fell 42 basis points to 4.439 percent.
The 5-year bond yield also fell to 3.95 percent, its lowest level since September 23.
What happened?
On September 23, it was announced that the government was preparing to implement tax cuts totaling 45 billion pounds.
With the tax cut package announced after Prime Minister Liz Truss took office, the depreciation in sterling reached historic levels.
Following the reactions to the tax package, Finance Minister Kwasi Kwarteng left his post last week and was replaced by Jeremy Hunt.
Kwarteng, who was in office for only 38 days, became “the shortest serving Finance Minister in the UK since 1970”.
