could backfire unless it results in a wave of international investment flowing into the UK.was the largest tax-cutting event in half a century, with Chancellor Kwasi Kwarteng axing the 45 per cent tax rate for those earning more that £150,000, knocking 1p of all earners’ income tax, and reversing the national insurance hike implemented by former Chancellor Rishi Sunak less than six months ago.
“If we see a strong level of investment then that should drive the growth that the Government is looking for.” Paul Johnson, director of the Institute for Fiscal Studies , added: “Mr Kwarteng is not just gambling on a new strategy, he is betting the house.” The IFS believes the tax cuts will lead to UK borrowing reaching £190bn in the current financial year. At 7.5 per cent of national income this would make it the third-highest peak in borrowing since the Second World War, after the global financial crisis and the Covid-19 pandemic.
DavidParsley50 They wont. Inward investment is driven by strategic factors -resources R&D skills. Unlike financial flows responding only to prices. Because financial flows can move quickly in and out. Investment us slow and long term.
DavidParsley50 We are fucked. Imports going to be more expensive. 10% base rate coming up as inflation is going to run & run.
DavidParsley50 This could be the Truss miracle. Or more likely, The Kwarteng disaster. Trickle down Truss.
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