The £45bn huge tax give away, financed on the UK’s credit card of already eye-watering borrowing, shows one thing at least, that new Chancellor Kwasi Kwarteng is not afraid to act decisively. But whether his dash for growth will prove inspired or foolhardy we will not have too long to wait - with the economy already moving towards recession and interest rates set to climb further to tackle inflation.
In essence Mr Kwarteng, whose strategy has been labelled by critics as trickle down economics that will mainly benefit the rich, is pinning his hopes on stimulating investment and growth which in turn will create higher tax receipts - as he aims to hit an average 2.5% growth rate over the medium-term.
The UK Government’s fiscal rules, which stipulated that debt should be falling as a share of gross domestic product within three years, is now under review. Concerns that the outcome of the mini-Budget will drive up debt and fuel inflation was reflected in the pound losing more ground against the dollar after his address.
