Market News

New Chancellor Jeremy Hunt reverses “almost all” of Truss’s mini-budget

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The move marks a near-complete U-turn after the ‘mini-budget’ which spooked markets and led to Kwasi Kwarteng’s resignation.

Britain’s new Chancellor has announced that he is scrapping “almost all” of the tax cuts in Liz Truss’s disastrous ‘mini-budget’ which spooked markets and let to weeks of financial turmoil in the UK. 

In the wake of Hunt’s announcement, the pound surged against the dollar and was trading at $1.13.

The interest rate on government bonds also fell. 

Hunt said that a planned 1p cut in income tax will be shelved “indefinitely” while reforms to off-payroll working rules will no longer be reversed, and the Government’s energy price guarantee will be re-assessed in April next year. 

Banker bonus cap

One of the only measures to remain is the removal of the cap on bankers’ bonuses, which will still go ahead. 

Hunt said, “We will reverse almost all the tax measures announced in the Growth Plan three weeks ago that had not started parliamentary legislation.

“A central responsibility for any government is to do what’s necessary for economic stability. This is vital for businesses making long term investment decisions and for families concerned about their jobs, their mortgages and the cost of living.

“No government can control markets, but every government can give certainty about the sustainability of public finances, and that is one of the many factors that influence how markets behave.”

“Taken together with the decision not to cut corporation tax and restoring the top rate of income tax the measures I’ve announced today will raise around 32 billion pounds every year.”

New approach on energy

The basic rate of income tax will remain at 20% until a future review of the issue, Hunt said. 

Hunt is to discuss measures for supporting energy bills from next year, with a Treasury review looking for “a new approach that will cost the taxpayer significantly less than planned”.

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