London
CNN business
—
British Prime Minister Liz Truss is preparing to hold a news conference on Friday, prompting widespread speculation that she is preparing to abandon much of her economic strategy announced just three weeks ago.
Finance Minister Kwasi Kwarten unveiled her ‘mini-budget’ on Sept. 23, promising big tax cuts and more borrowing, and fears it would fuel inflation at a time when prices were already rising. plunging the pound and government bonds from Fastest in 40 years.
This prompted the Bank of England to warn of serious risks to the UK’s financial stability and to launch three separate measures to calm the bond market meltdown that has brought some UK pension funds to the brink of default. announced an intervention.
The unfunded tax cuts have been heavily criticized by investors, the International Monetary Fund, credit rating agencies and members of Truss’s own party, some of whom are now threatening to dismiss her as prime minister in just five weeks. are reportedly talking about
Kwarteng flew back from an IMF meeting in Washington DC on Friday to discuss the plan with Truss.
“After successfully completing a series of meetings at the IMF, the Prime Minister will return to London today to continue work on the medium-term financial plan,” the Treasury said in a statement.
As bond prices rose, yields on 30-year UK government bonds fell to 4.3%, down from a recent peak of over 5%. The pound he was trading at $1.12. It fell to a record low of $1.03 on September 26.
With the Bank of England’s £65bn ($73.3bn) emergency bond-buying program launched on Sept. I’m worried. The government must quickly explain how to pay for the tax cuts.
Under pressure, Kwarteng submitted the full budget on October 31, more than three weeks ahead of schedule. But investors may not be ready to wait so long to feel reassured about the UK’s financial situation.
The UK government has already abandoned plans to cut the top rate of income tax, and media reports suggest it may also reconsider plans to scrap the business tax hike.
A Truss spokesperson denied on Thursday that the government intended to make another “U-turn”, but Trade Minister Greg Hands said, “Let’s wait and see” when asked the same question on Friday.
“We don’t have to wait for the prime minister to announce those plans on October 31st,” Hands said in an interview with Sky News.
— Luke McGee and Zahid Mahmood from London and Xiaofei Xu from Paris contributed to this article
