Liz Truss is set to sign off a package of tax cuts designed to boost economic growth despite warnings it could drive up borrowing and push the pound lower. 🔴 HugoGye and jessiehewitson
Pensions expert Tom McPhail, the director of public affairs at insight, marketing and communications consultancy, The Lang Cat, said: “The only thing Truss is concerned with is growth and she will throw everything away that doesn’t deliver on that. We’re borrowing vast sums of money and if this gamble doesn’t pay off, the pound is toast.”
Steve Webb, the former pensions minister in the coalition government, added: “The big worry is that this money isn’t coming from nowhere, and what happens if the growth doesn’t materialise which will leave a big funding hole? Banks will then have to go further to offset the money the Government is giving to us.”
A Treasury spokesman said: “In the face of soaring energy prices caused by Putin’s aggression in Ukraine, it is absolutely right that the Government takes action now to help families and businesses, just as we did during the pandemic. Without urgent support, the alternative would have been unthinkable. However, the Government is committed to getting debt down in the medium term, and will update on how we will do that in due course.
Speaking in New York, Ms Truss promised “lower, simpler taxes in the UK to incentivise investment, to get more businesses going in the UK, but also to encourage more people to go into work.” She added: “We’re also going to be introducing low-tax investment zones across the country, in parts that are left behind. It’s going to be easier to get things done in those zones.”
During the Conservative leadership election, Rishi Sunak repeatedly claimed that his rival’s economic plans would drive up inflation and force the Bank of England to raise interest rates more quickly to balance out the money the Treasury would pump into the economy.: “She’s playing craps with the economy. Every extra percentage point on our borrowing costs £20bn, which is half the defence budget.
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