Newly elected Prime Minister of the UK, Liz Truss’s plan for growth, melding the biggest tax giveaway in half a century with Thatcherite deregulation, is a straight-up gamble with Britain’s future, and even before her chancellor of the exchequer had finished delivering it on Friday the bet was starting to sour, the Bloomberg has reported.
“The market’s verdict on the £220 billion policy blitz set out by Kwasi Kwarteng was swift and devastating. Sterling crashed below $1.11 for the first time since 1985, taking its slump for the year to date to 19%. Five-year gilts posted their biggest ever daily decline,” the report added.
Meanwhile, according to the reports in British media, Liz Truss’s 45bn pound tax cutting spree has set Britain on course for a bailout from the International Monetary Fund
“Nouriel Roubini, an economist who famously predicted the financial crisis, has warned that British investments are trading “like an emerging market” as he drew parallels with the economic chaos of the 1970s,” the Telegraph has reported.
“Mr Roubini said on Twitter that Britain is heading “back to the 1970s” and “eventually the need to go and beg for an IMF bailout” following huge tax cuts unveiled by Kwasi Kwarteng in his mini-Budget,” the report added.
The pound has hit an all-time low against the dollar after the bonanza of tax cuts and spending measures in Kwasi Kwarteng’s mini-budget threatened to undermine confidence in the UK.
The pound plunged nearly 5% at one point to $1.0327; it’s lowest since Britain went decimal in 1971, as belief in the UK’s economic management and assets evaporated.