- The pound exchange rate fell sharply
- Steps had to be taken to stop the economic crisis
- The country is facing low growth rate and high taxation
Liz Truss: Troubled Britain’s Prime Minister Liz Truss on Friday announced the appointment of former cabinet minister and top party contender Jeremy Hunt as the new finance minister. Along with this, he has canceled the proposal to cut company tax. Earlier, he sacked his close finance minister Kwasi Quarteng. This step has been taken to prevent the upheaval in the economy due to the mini budget proposed to cut tax at the end of last month.
in line with market expectations
Truss announced changes in the finance ministry at a press conference. With this, he confirmed that the government will increase the tax for companies from 19 percent to 25 percent from April 2023. This proposal was made by former Finance Minister Rishi Sunak, which was announced by Quarteng to be withdrawn. This move of the truss is in line with the expectation of the market. “It is clear that the announcement made in the mini budget was more than what the market expected. That’s why we have to change the way we work.” Truss said, “We need to act now to reassure the markets about our fiscal discipline. Therefore, I have decided to continue with the proposal of the previous government to increase the company tax.
Present financial plan for the period
Regarding the new finance minister, he said, “Today I have asked Jeremy Hunt to be the new finance minister. He is one of the most experienced and widely respected government ministers and parliamentarians. “He will present a medium-term financial plan later this month,” he said. Hunt himself was in the running for the top post after Boris Johnson resigned in July. But after not getting the support of enough members of the Conservative Party, he supported Sunak, the former finance minister. His appointment is also being seen as an attempt by Truss to resolve differences within the party.
To be successful, it has to change
Truss said in a letter to Quarteng that he was saddened by his resignation. She indicated that she still believes in the macroeconomic approach set out in the controversial mini-budget. Quarteng’s tenure was only 38 days. He has written on Twitter that he has been asked to step down from the post of Finance Minister. He wrote in his resignation letter, “As I have said several times in the last few weeks, maintaining the status quo is not an option. For a very long time this country has been suffering from low growth rate and high taxation. Changes have to be made in this country if it is to be successful.” Tax cuts were announced during his tenure, which led to a sharp fall in the pound’s exchange rate. Due to this the Bank of England had to take steps to stop the economic crisis.
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