UK Economic U-Turn creates interesting possibilities

Britain’s new finance minister announced a comprehensive retreat on the UK government’s tax-and-spending plans on Monday in a frantic effort to control jittery markets.

Just four days into the job, Jeremy Hunt said he would reverse almost every tax measure announced three weeks ago, including a proposed cut to the basic rate of income tax from April 2023. The stunning reversal would raise £32 billion ($36 million), he said.

The move represents almost a complete reversal of the tax-cutting plans of the Prime Minister, Liz Truss, and leaves her in a perilous political position.

The announcement helped ease alarm in financial markets on Monday. UK government bond prices rose and the pound climbed 1% to nearly $1.13.