Friday 23 September 2022 09:44 AM Kwasi Kwarteng gambles with huge tax cuts in 'Emergency Budget' trends now

Friday 23 September 2022 09:44 AM Kwasi Kwarteng gambles with huge tax cuts in 'Emergency Budget' trends now
Friday 23 September 2022 09:44 AM Kwasi Kwarteng gambles with huge tax cuts in 'Emergency Budget' trends now

Friday 23 September 2022 09:44 AM Kwasi Kwarteng gambles with huge tax cuts in 'Emergency Budget' trends now

Kwasi Kwarteng is rolling the dice on the country's future today by unveiling the biggest package of tax cuts in three decades in a bid to end the UK's 'cycle of stagnation'.

The Chancellor is presenting an 'emergency Budget' to the Commons with slew of dramatic measures designed to boost growth.

In an intervention the scale of which rivals the Covid response, Mr Kwarteng is set to reverse the national insurance hike, as well as scrapping a huge planned increase in corporation tax and limits on City bonuses.

Dozens of low-tax and low-regulation 'Investment Zones' are being created across the country. But the shock and awe tactics are expected to go even further, with aides promising 'rabbits' among 30 policies. 

What is Kwasi Kwarteng announcing today? 
Reversing the national insurance increase Scrapping the scheduled increase in corporation tax    Axing the cap on City bonuses  Reducing stamp duty  Bringing forward 1p income tax cut?  Creating low-tax Investment Zones Costings for the energy bills freeze 

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Action to reduce stamp duty seems highly likely, while there is strong speculation that the 1p cut in the basic rate of income tax could be brought forward to next year. 

The barrage is not technically a Budget, but a 'fiscal event' - meaning that controversially it will not be accompanied by any of the usual independent costings from the OBR.

And economists have voiced alarm at the massive borrowing that will be required to cover the hole in the government's books. The two year freeze on energy bills for households and businesses announced earlier this month could cost more than £150billion by itself, while the tax cuts could add a further £50billion to the tab.

The respected IFS think-tank suggested it would be the biggest tax move since Nigel Lawson's 1988 Budget, when Ms Truss's heroine Margaret Thatcher was PM.

The dangers of ramping up the UK's £2.4trillion debt mountain while the Ukraine crisis sends inflation soaring have been underlined by the continuing slide in the Pound against the US dollar, reaching a fresh 37-year low of barely 1.11 this morning. 

Markets have pushed up the government's borrowing rates to an 11-year high.

In August and September so far the 10-year yield on government gilts has seen the biggest increase since October and November 1979, emphasising the nervousness of markets about the situation.

However, Ms Truss and Mr Kwarteng argue that ramping up economic activity can make up the difference, pointing to decades of lacklustre productivity improvements.  

The Bank of England pushed up interest rates by 0.5 percentage points to 2.5 per cent yesterday, the highest level since 2008. But it surprised many by stopping short of a bigger increase, suggesting that UK plc is already in recession.  

Chancellor Kwasi Kwarteng is presenting an 'emergency Budget' to the Commons with slew of dramatic measures designed to boost growth

Chancellor Kwasi Kwarteng is presenting an 'emergency Budget' to the Commons with slew of dramatic measures designed to boost growth

Mr Kwarteng entering Downing Street by the back entrance this morning ahead of his 'Emergency Budget'

Mr Kwarteng entering Downing Street by the back entrance this morning ahead of his 'Emergency Budget'

Liz Truss leaves Downing Street for the Commons on what could prove to be a pivotal day for her premiership

Liz Truss leaves Downing Street for the Commons on what could prove to be a pivotal day for her premiership

The Bank of England raised interest rates by 0.5 percentage points yesterday, in an effort to contain rampant inflation

The Bank of England raised interest rates by 0.5 percentage points yesterday, in an effort to contain rampant inflation

Before the Commons statement this morning the Pound had hit another 37-year low against the US dollar

Before the Commons statement this morning the Pound had hit another 37-year low against the US dollar

The interest bill on the UK's £2.4trillion debt mountain hit £8.2billion last month, the highest figure for August since records began in 1997

The interest bill on the UK's £2.4trillion debt mountain hit £8.2billion last month, the highest figure for August since records began in 1997

Mr Kwarteng told MPs: 'Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise.

'This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s. We are determined to break that cycle. We need a new

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