However, following his resignation on 14 October 2022 he was replaced by Jeremy Hunt, who scrapped proposed tax cuts and reinstated a planned rise in corporation tax from 19% to 25% for companies earning more than £50,000 in profits.Īccording to the latest figures from the Office of National Statistics ( ONS), the UK economy is estimated to have shrunk by 0.3% in August 2022, following modest growth of 0.2% in July. Former Chancellor of the Exchequer Kwasi Kwarteng had vowed to stick with his tax-cutting drive, prompting warnings that the UK was entering a currency crisis. Sterling fell as the outlook for the UK economy deteriorates amid rising inflation fuelled by sanctions on Russia, which have pushed up energy prices, and the aftermath of Covid-era quantitative easing.
The brutal sell-off in UK government debt may have come in the context of rising yields across the globe, but it largely reflected financial markets getting increasingly concerned about the direction of UK macroeconomic policy.” “Nothing in gilt markets in the past 35 years – not the UK’s ejection from the Exchange Rate Mechanism, 9/11, the financial crisis, Brexit, Covid or any Bank of England move – compares with the price moves in reaction to the chancellor’s mini-budget.
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