The plan, presented by the British Minister of Finance, Jeremy Hunt, plans 55 billion pounds of tax cuts and budget cuts in public spending. He must reassure the British markets and the Bank of England after the failure of Liz Truss and in full recession.
Le Monde with AFP
“stability”, “growth” and “public services”: such were the watchwords of the British Minister of Finance, Jeremy Hunt, who unveiled, Thursday, November 17, an austerity budget to redress the finances of UK. This provides 55 billion pounds of tax increases and cuts in public expenditure, although the country has already entered recession.
“This is a balanced stability plan”, “I tried to be just by asking those who have more to contribute more,” said Hunt, in the sober tone, in front of Parliament. “The United Kingdom, like other countries, is now in recession” According to the OBR, the public body for budget forecasts, has argued the minister, and its gross domestic product will further drop by 1.4 % in 2023. Jeremy Hunt unveiled “three priorities: stability, growth and public services”. Stability, after the financial turbulence of the previous government, comes at the top of the list, and with it the fight against inflation, “which affects the poorest”.
According to him, the OBR has “confirmed that global factors are the main cause of inflation, most countries still faced with the spinoffs” of the Pandemic of Covid-19, aggravated by “the crisis Energy generated by [the invasion of Ukraine by] Russia “.
reassure the markets after the” mini-dubbing “of Liz Truss
By listing the set of budgetary “consolidation” measures of 55 billion pounds in total, he mentioned the lowering of the highest threshold of income tax and an increase in the tax on income tax Exceptional of oil and energy giants, doped by the outbreak of the energy market.
The new Minister of Finance had the heavy task of reassuring the markets scalded by the massive and poorly prepared budgetary announcements from the previous Prime Minister, Liz Truss, who had British markets pitch and fly the cost of debt of the country.
The Minister took great care to rely on OBR figures, whose absence during the disastrous “mini-budget” of the previous government had contributed to panic on the markets. Mr. Hunt has already erased most of the measures which had then been announced by the ephemeral Liz Truss, who wanted to carry out massive energy aid and all -out tax cuts.
a recession who could last two years
These announcements occur while the economy has already contracted 0.2 % of the gross domestic product in the third quarter. The recession that begins could last up to two years according to the Bank of England, even if, for this year, the OBR predicts growth of 4.2 %.
Apart from the COVVI-19 and the war in Ukraine, the United Kingdom suffers from the impact of Brexit, which leads to trade with its great European neighbor and hinders the hiring of workers on the continent, which contributes to inflation and loss of productivity.
London will increase its exceptional tax on the profits of energy giants by 25 % to 35 %, and will extend it by three years, until 2028. Mr. Hunt also announced “a new temporary tax of 45 % on the electricity producers “.