Prime Minister Truss “Announcing Energy Measures on the 8th… No Wealth Tax on Energy Companies”
Finance Minister “Lending will increase … Meeting twice a week with the head of the central bank to coordinate policies”
The day after British Prime Minister Leeds Truss took office, the pound fell to its lowest level in 37 years on fears of a recession.
The British pound depreciated about 1% against the dollar around 2 p.m. on the 7th (local time), and the exchange rate fell to $1.1407, the lowest level since 1985 when Margaret Thatcher was prime minister.
When new Prime Minister Liz Truss took office the day before, he called for tax cuts and economic growth, but the market responded by selling the pound.
At the beginning of the Corona 19 crisis in March 2020 and during the Brexit vote in 2016, it was around $1.14, but it was not so low.
The pound has fallen 15% against the dollar this year.
The lowest exchange rate ever recorded was $1.05 in 1985.
Archyde.com reported that financial markets are worried that the government’s debt will have to rise significantly to pay for Truss’ tax cuts and household support policies.
After the first cabinet meeting on the same day, Prime Minister Truss attended the Prime Minister’s Q&A (PMQ) and announced on the 8th that he would announce measures to cope with the surge in household energy prices.
Archyde.com and the BBC reported that Prime Minister Truss is considering a policy to freeze energy prices, which will cost £100 billion.
Prime Minister Truss ruled out a wealth tax on energy companies when it comes to financing the freeze on energy rates.
“I’m against a wealth tax on energy companies,” he said.
“I think it’s wrong to make companies dislike investing in the UK.”
If this happens, the UK government will have to increase its debt to pay for it.
New Finance Minister Quaji Kwateng met with business leaders and said borrowing could increase in the short term to support households and businesses.
“The prime minister and I will take decisive action to help the British people while promoting growth-friendly policies,” he said.
He also announced that he would meet regularly twice a week with Andrew Bailey, president of the Bank of England (BOE), the central bank, to coordinate economic support measures.
“We agreed that controlling prices quickly is key to avoiding the cost of living problem,” he said after meeting with Bailey this morning.
/yunhap news