Prime Minister Liz Truss vowed to “usher in a decade of dynamism” and Chancellor Kwasi Kwarteng said their tax cuts were just the “first step towards igniting growth” as the pair were forced to defend the controversial measures.
Using more than £70 billion of increased borrowing, Mr Kwarteng announced the biggest programme of tax cuts for 50 years, including abolishing the top rate of income tax for the highest earners. The £45 billion tax-slashing package was met with alarm by leading economists, some Conservative MPs and financial markets – with the pound tumbling to fresh 37-year lows.
Economists predict sterling could plunge to parity with the US dollar by the end of the year. Such a slump could trigger a rebellion from Tory backbenchers, who could refuse to vote for the Government’s finance bill or submit letters of no confidence, the Telegraph reported, citing backers and critics of the Prime Minister.
