UK Prime Minister Liz Truss visits Berkeley Modular, on September 23, 2022 in Northfleet, England
(Picture: Getty Images)The Chancellor’s mini-budget was intended to end the cost of living crisis and revive the UK economy. But by triggering a dramatic reaction in the financial markets, it looks as though the Chancellor has inadvertently created a cost of borrowing crisis and put the UK economy back on life support.
Last Friday’s mini-budget does mean that taxes for both households and businesses will be lower than they would otherwise have been. The problem isn’t that the Chancellor, Kwasi Kwarteng, is going to fund those tax cuts by borrowing more. Instead, the real issue is that he indicated there is more to come and he failed to lay out any means of restraint. It’s like he’s just got hold of the government’s credit card and removed the credit limit at the same time.
