There is international pressure on Kwasi Kwarteng to change course after his mini-budget spooked the markets with its package of tax cuts and increased borrowing. In an extraordinary statement, the International Monetary Fund (IMF) said it was “closely monitoring” developments and urged the Chancellor to “re-evaluate the tax measures”.
It warned the current plans, including the abolition of the 45p rate of income tax for people on more than £150,000, are likely to increase inequality. The move came as the Bank of England signalled it was ready to ramp up interest rates to shore up the pound and guard against increased inflation.
The Chancellor insisted he was “confident” his tax-cutting strategy will deliver the promised economic growth. After a day of turmoil in the markets on Monday which saw sterling slump to a record low against the dollar, the Chancellor sought to reassure City investors he has a “credible plan” to start reducing the UK’s debt mountain.
