Truss administration refuses to back down on the mini-budget despite the chaos

During an interview with BBC radio station on Thursday, British Prime minister Liz Truss defended her economic plan despite the turmoil. As per Reuters report, she said, “This is the right plan that we’ve set out.”

She further added that the UK is in a difficult economic situation. This is not something I deny. This is a global issue. But what is absolutely correct is that the UK government has intervened and acted during this difficult time, as cited by the report.

The UK treasury ministry has also announced that the administration will not take a U-turn on the mini-budget despite the Bank of England having to step in amid market turmoil. According to the BBC report, treasury minister Andrew Griffith refuses to cast aside the mini-budget, saying that Government’s proposal is the “right plan” to upgrade the economy.

He further added that “every major economy is dealing with the same issues” and said the impact of “Putin’s war in Ukraine is cascading through things like the cost of energy, some of the supply side implications of that”.

Earlier on Wednesday, the Bank of England steps in to calm the market turbulence caused by the truss administration’s tax-cutting plans. The bank alerted that ongoing market volatility would pose a “material risk to UK financial stability.”

As per the report, the value of the pound dropped to $1.05 on Wednesday, after the bank of England statement. The Bank also announced that it would temporarily purchase government bonds to “restore orderly market conditions.”

Moreover, according to Sky News, Britain’s chief secretary to the Treasury, Chris Philp disagreed with the concerns raised by IMF by saying that “I saw the IMF comments. I respectfully disagree.”
According to Anadolu Agency, The International Monetary Fund (IMF) on Tuesday issued a warning to the United Kingdom regarding the government’s recently announced mini-budget, stating that the nature of current financial metrics will “likely increase inequality,” and asked the British Chancellor Kwasi Kwarteng to “Reevaluate the tax measures.”

Earlier on Friday, British finance Minister Kwasi Kwarteng revealed a slew of initiatives aimed at lowering taxes and energy bills for individuals and businesses to spur economic growth, which would require a massive increase in borrowing, which cause the chaos in the market, as cited by Reuters.

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