Might this be the biggest u-turn in British economic history?
While the planned cuts to stamp duty and national insurance will continue, the basic rate of income tax will stay at 20p, rather than being reduced to 19p, “indefinitely until economic circumstances allow for it to be cut”. Of the £45bn in tax cuts first announced in the mini-budget, £32bn will now be reversed.
The chancellor’s statement from the Treasury this morning comes ahead of a more detailed announcement in the House of Commons later today, but was intended to calm the markets.
“The most important objective for our country right now is stability,” he said, “Governments cannot eliminate volatility in markets but they can play their part and we will do so.”
Hunt also revealed that the energy price guarantee will only last until April, and will be followed by a more targeted system to help the most vulnerable but also save money for taxpayers.
Sign up for our FREE Reaction Weekend Email
Read the week's best-read articles on politics, business and geopolitics
Receive offers and exclusive invites
Plus uplifting cultural commentary
The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need,” the chancellor said.
Following the announcement, the value of the pound has risen, now trading at $1.13, while government bonds have also rallied.
Write to us with your comments to be considered for publication at firstname.lastname@example.org