UK’s budget plans announcement

The UK’s finance minister Jeremy Hunt is ready to announce plans to clean up the country’s financial system in order to calm down markets, which still show discontent with the economic program suggested by Prime Minister Liz Truss.

Hunt will make an announcement on measures to “support fiscal sustainability”, and later this day he will present it in the British House of Commons.

The UK’s finance minister has generally stated his approach for financial system recovery, which is absolutely different from the Truss’s economic plan. According to Hunt, taxes have to be increased, while spending, on the contrary, have to be decreased. This approach might be considered as an attempt to prevent further growth of the UK’s government borrowing cost.

Prime Minister Liz Truss, in turn, was forced to reconsider her economic program because after her announcement on lowering taxes by 45 billion pounds investors began to sell the national currency. As a result, she had to dismiss her first chancellor and postpone the plan for freezing corporate tax, as well as lowering maximum tax rate.

Economists continue to draw attention to the fact that the budget deficit remains acute. According to Bloomberg Economics calculations, it will take about 24 million pounds to bring the country's national debt back to a sustainable state. The Sunday Times reported that Hunt considers postponing the plan of lowering the basic rate of income tax for a year, thereby saving 5 billion pounds (i.e., $6 billion).