Britain’s Bounce Back – U.K.’s Attempts To Limit Debt Growth 🇬🇧
After a dismal package of measures that arguably forced Liz Truss’ resignation as U.K’s prime minister just on her 50th day in office, Britain has announced their plan to tackle high debt growth in the economy. Her successor Rishi Sunak and Chancellor Jeremy Hunt have confirmed their new proposal to regain investor sentiment, including spending cuts of $66 billion (£55 billion) and tax increases. They hope this attempt will help alleviate high government debt by 2028, as most of these spending cuts will commence by 2025 after the British general election.
This economic practice of high taxes can be seen as a way to combat high inflation numbers in the West, something that has been more thoroughly uncovered over the past several weeks. In the United States, most retail companies’ earnings numbers and the data on retail sales have pointed to persistent consumer spending, something that has continued since the pandemic. However, in 2023 these new taxes in the nation will be the highest level of tax burden the U.K. has seen since World War II. Several analysts do claim that the new package of measures offered by Hunt will, of course, hurt economic growth, sending Britain into a recession with hopes that it can be shallower if done otherwise. Regardless, the brisk move all relies upon market confidence, hoping to reverse the consequences of large tax cuts, high debt, and weakened pound bestowed by former prime minister Liz Truss.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
