Consumer money expert Martin Lewis has described the government's financial plan as "staggering" after the so-called mini-budget from Chancellor Kwasi Kwarteng was announced. Mr Lewis, founder of MoneySavingExpert, was reacting after the UK government announced massive tax cuts as part of a mini-budget worth billions of pounds on Friday.
It will see the top 45% rate of tax in the UK scrapped and the basic rate fall to 19% next year as well as a reversal of the rise in National Insurance, universal credit rules tightened for low-income households and the cap on bankers' bonuses lifted. Critics say the huge borrowing needed to fund the tax cuts could lead to financial disaster in the UK, which is already seeing its highest rate of inflation in four decades.
Read more: New Chancellor Kwasi Kwarteng scraps top rate of tax and cuts the basic rate to 19% next year
Mr Lewis reacted to the announcement by Chancellor Kwasi Kwarteng in the House of Commons, tweeting: "That really was quite a staggering statement from a Conservative Party government. Huge new borrowing at the same time as cutting taxes.
"It's all aimed at growing the economy. I really hope it works. I really worry what happens if it doesn't."
Mr Kwarteng said the plans were aimed at growing the economy by 2.5% but critics say the borrowing needed to fund the tax cuts could lead to financial disaster. Bloomberg reports that 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.
He told Bloomberg Television: "Other experiences where the chancellor has gone for growth ended in tears. I expect the same sort of thing will happen with Kwarteng’s policy. There will probably be a clear run on the pound, and then the bank will be forced to put up interest rates to stabilize the exchange rate.” You can read everything Mr Weale said here.
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