Loading ...UK Markets Implode After Truss Unveils Historic Tax Cuts As Economy Slides Into Recession Amid Soaring Prices
New UK Chancellor Kwasi Kwarteng has stunned (read crashed) UK markets by making giant economic gamble with his ‘mini-budget’ to “turn the vicious cycle of stagnation into a virtuous cycle of growth” whose goal is to shock the UK economy back to life with a massive 45 billion pound tax cut – the largest since the 1970s – including slashing the 45% additional tax rate for the highest earners. Instead of stabilizing markets, as some maybe hoped in light of the relentless plunge in cable to the lowest level since 1985 – the announcement sparked mayhem instead as it promises even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar, and tax cuts will only ensure even more inflation, just as Albert Edwards warned last night.
As note above, Kwarteng unveiled the most significant tax cuts since the 1970s, to be funded at a time when interest rates are soaring. He abandoned Boris Johnson’s economic policies to increase taxes to pay for public services, while the Bank of England warned earlier this week the economy ‘might already be in recession’.