British Prime Minister Liz Truss announced a financial package to support people with energy bills.
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LONDON – British Prime Minister Liz Truss on Thursday defended fiscal policies announced last week that caused chaos in UK markets, saying the country had been put on a “better trajectory.” “
Speaking in an interview on local BBC radio stations, she said her government’s “decisive action” would curb inflation by 5 percentage points, reducing taxes for people and businesses. , supporting rising energy bills and avoiding an expected economic slowdown.
“I understand that families are struggling with their fuel bills, and we had to act urgently to get our economy going, moving Britain forward and also dealing with the inflation,” she said.
“And of course, that means having to make controversial and difficult decisions. But I’m prepared to do that as prime minister, because it’s important to me that we are. get your economy going.”
Truss took office on September 6.
Measures released last Friday including the biggest tax cuts since the 1970s, expected to total £45 billion ($48.6 billion). It sparked a history sell off UK government bondss and a rapid decrease in the value of pound against the dollar, against the British pound hit an all-time low Monday.
Analysts say investors are expressing a lack of confidence in the government’s ability to grow the economy while taking on more debt, as they spend what is expected to cost at least 100 billion pounds for energy support packages in the coming years. Critics of the plan have said it is likely increase inequality and leading to higher prices of imported goods due to a weaker pound.
Meanwhile, expectations of faster and higher rate hikes by the Bank of England caused mortgage lenders to pull products. Fourth Central Bank speak it will suspend plans to start selling gold plating next week and instead begin temporary purchases of long-term British government bonds in an attempt to calm market volatility.
When asked how she thinks the announcement has gone, Truss said: “It has ensured that people and businesses will pay lower taxes, it has opened up new road projects, infrastructure projects. new, which means we can continue to do these things that will help people whether it’s going to work, starting their own businesses and growing the economy.”
She blamed President Vladimir Putin’s war in Ukraine for highlighting the energy crisis and putting economic pressure on governments around the world.
Analysts have emphasize that the UK bond market emerged in a confrontation between Bank of England raises interest rates to cool demand and fight inflation, and the UK Treasury is currently trying to avoid a recession by introducing inflationary fiscal measures.
Truss said she and Finance Minister Kwasi Kwarteng were working closely with the Bank of England but it was important for the bank to be independent and make decisions on rates.
She added: “A lot of the measures we’ve announced aren’t going to happen overnight. We’re not going to see growth overnight. But the important thing is that we’re taking it. This country is on a better trajectory in the long run.”
– Additional reporting by Anmar Frangoul
