British Prime Minister Liz Truss took action on Sunday to appease her party and the public, saying she should have done more work to better "lay the foundation" to minimize market reactions. Previously, the pound fell to a record low and government borrowing costs soared. She said she intends to stick to her entire fiscal plan, claiming that only her proposed plan to turn the UK into a low-tax, high-growth economy can turn the "current recession trajectory".
Tras said in an interview with British media before the opening of the Conservative Party fall conference on October 2 that he supported the "small budget" policy, but admitted that he should "lay a good foundation" for the proposal of this plan.
Less, who had been on the stage for less than a month, took a gentle tone, trying to assure the public that she would take care of them during the tough winter and later. But she sticks to her "growth plan", which investors and economists criticized for proposing billions of pounds of additional spending, but rarely provides details on how to pay for them in the near term.
Tras said in an interview: "I understand their concerns about what happened this week."
She also said: "I support our announced package , and I support us to quickly announce this plan because we have to take action. But I also admit that we should lay the foundation better."
Recently, the new British Prime Minister Tras announced the largest tax cut since the 1970s, including the cancellation of the plan to raise corporate tax to 25%, the reduction of personal tax rates for annual incomes of more than £150,000 from 45% to 40%, significantly cut home purchase taxes, lifting bankers' bonus ceilings, etc., aiming to pull the UK back from the brink of recession to pre-pandemic levels.
British Finance Minister Kovoten said, "In the new era, we need a new way to focus on growth", but worried investors did not buy it, and the pound then plummeted to an all-time low.
According to a poll released by market research firm YouGov on September 30, among the nearly 5,000 British people surveyed, 451% of the respondents said that Tras, who had only been in office for only three weeks, should resign from , and only about 1/4 of the respondents believe that she should stay. In addition, 54% of respondents believe that Chancellor Kwasi Kwoten should resign. Bloomberg said that not long ago, British Chancellor Kwasi Kwaten released the government's "mini budget". The large-scale tax cuts triggered turmoil in the financial market and the outside world's concerns about the further expansion of British Treasury bonds, which exacerbated the "hard situation" of the Trass government.
Based on the above news, we can see that although British Prime Minister Tras insists on implementing a large-scale tax cut plan, the outside world still has low expectations for him. At present, the pound is still fluctuating in a narrow range. Investors need to pay attention to the effectiveness of the new government policy, which is expected to boost the pound if it is effective.
GBP/USD daily chart
This article is from Huitong.com
