The “minibudget” of the new British Prime Minister, which provides more than 40 billion sterling pounds of unsuccessful tax cuts, caused brutal turbulence.
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Rumors were going well, Thursday, October 13, on the imminence of a first renunciation of Liz Truss concerning his “minibudget”. The project, almost unanimously considered catastrophic, provides more than 40 billion pounds sterling (46 billion euros) of unlikely tax cuts – if not by public debt. Three weeks after the British Prime Minister and his Chancellor of the Echiquier, Kwasi Kwarteng, presented it, on September 23, the financial markets are feverish and the conservative deputies, panicked.
According to anonymous sources quoted by the Sky News channel, the Guardian or the Financial Times, discussions take place between Downing Street and the British Treasury to come back to the rise planned by Boris Johnson Companies (Liz Truss had promised to remove it). The Bloomberg agency specifies that a firm decision will probably not be made before this weekend and the return of Mr. Kwarteng de Washington, where he participates in the annual summit of the International Monetary Fund.
Financial operators already seemed to have joined the “good news” of the government flip-flop on Thursday. The pound has risen significantly compared to the dollar and the remuneration of British state loans has dropped slightly, a sign of a slight revival of confidence in the British economy. Kwasi Kwarteng, however, continued to assert since Washington that he was “concentrated” on the execution of the “plan for growth” of M me truss and that he would not go “nowhere” that in Westminster the media speculated intensely on his resignation. At the end of the day, however, he conceded a “we will see” the question of whether his minibudget was suspended.
Liz Truss was discreet Thursday – just knowing that she was taking tea with deputies from her conservative camp in the hope, probably, to coax them. But these gestures of appeasement seemed derisory in the face of the deep discredit from which the leader now suffers. Because even if this ultraliberal, self -proclaimed admirer of Margaret Thatcher, still refuses to recognize the failure of her “plan for growth”, she is in the deadline and in recent days, her retirement has appeared inevitable.
Not credible
More and more experts and politicians – including in Tories – judge that his enormous fiscal stimulus was simply not credible, from an economic as a political point of view, and that he had to be Abandoned as quickly as possible, in order to limit the damage already inflicted on the reputation of serious budgetary of the United Kingdom and the savings of the British. Following the presentation of the minibudget, the real estate borrowing rates increased brutally. Tuesday, the Institute for Tax Studies (IFS), a research institute specializing in the evaluation of particularly respected public policies in London, published an edifying study, encrypting at 60 billion pounds Sterling annual cuts in public spending that The Truss government should impose to finance its tax cuts by maintaining public debt under control.
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