An economist has issued a dire warning about Liz Truss' plan to drastically cut taxes, saying they could lead to a 1970s-level financial crisis. The UK government is set to unveil a major fiscal plan worth billions of pounds this morning which will include rumoured cuts to National Insurance, income tax and corporation tax as well as removing a cap on bankers' bonuses.
The moves are part of a mini-budget being billed as a 'fiscal event' designed at curbing the current cost crisis which has seen inflation rise to a 40-year high and the UK set to fall into a recession. On Thursday the Bank of England raised the base interest rate from 1.75% to 2.25%, the highest it has been at since November 2008 during the financial crash.
Former Bank of England policy maker Martin Weale said the UK government’s radical tax cutting plan to boost growth will “end in tears” with a run on the pound and a crisis similar to that of the 1970s, when the UK had to be rescued by a loan from the International Monetary Fund.
