Today Chancellor Jeremy Hunt has reversed almost all new tax measures previously set out by new prime minister Liz Truss.
In review some of the changes are:
- The government is scrapping almost all of the tax measures announced in its mini-budget three weeks ago, new Chancellor Jeremy Hunt announces-
- The basic rate of income tax will remain at 20p indefinitely – instead of being reduced to 19p
- But the planned cut to stamp duty and National Insurance will go ahead
- Hunt says the government will also review the help it is providing with energy bills
- The announcement – bringing forward measures from an economic plan due on 31 October – is designed to deliver confidence and stability, Hunt says
- He will address MPs in the House of Commons at 15.30
- Liz Truss has endured a weekend of open dissent from the Tory ranks – with one former minister saying her position is untenable
- Commons Leader Penny Mordaunt has urged the party to back Truss, saying the UK needs stability “not a soap opera”
The Bank of England (BoE) has released a statement confirming that it “ceased all bond purchases on Friday 14 October”.
On 28 September, the Bank stepped in to buy government bonds saying its decision was driven by concern over “a material risk to UK financial stability”.
Last week – and for the third time since the mini-budget – the BoE said it would buy more government bonds to try to stabilise their price and prevent a sell-off that could put some pension funds at risk of collapse.
Today is the first time the UK government bond market has reopened since the bank’s emergency support programme ended on Friday.
“As intended, these operations have enabled a significant increase in the resilience of the sector,” the BoE said this morning.
Chancellor Jeremy Hunt says no government can control the markets but it can give certainty about public finances.
He says the plans he is announcing will avoid uncertainty ahead of the full fiscal plan announcement at the end of the month.
It will deliver confidence and stability, he adds.
Quote Message: As I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.”
For more information on these changes stay tuned to our blog on ePayMe.
Sources: BBC News