New British Prime Minister Rishi Sunak intends to raise taxes to cover a £50 billion (about $57.3 billion) deficit in the state budget, the Financial Times reports, citing sources in the UK Treasury.
Earlier it was reported that Sunak is reconsidering the issue of raising taxes and a significant reduction in government spending amid an improvement in the state of British finances. The British Treasury, in turn, reported that the new head of the Treasury, Jeremy Hunt, will present the government’s medium-term financial plan on November 17.
According to the publication, the Prime Minister of Britain and the head of the Ministry of Finance agreed on a tax increase on Monday.
“It will be tough. The fact is that everyone will have to pay more taxes if we want to keep public services. After borrowing hundreds of billions of pounds due to the (pandemic) coronavirus and implementing massive support for the payment of electricity bills, we will not be able to fill the budget hole only by cutting costs, ”the newspaper quoted an unnamed Treasury official as saying.
The former British government, led by Liz Truss, faced a flurry of criticism over a new plan to support the economy and fears that the Cabinet will increase the size of the national debt to implement it. The plan was presented in parliament by former finance minister Kwazi Kwarteng and involved a massive tax cut. After its announcement, the yield on five-year UK government bonds rose to the highest level since 2008 of 4.6%, which means a decrease in demand for debt securities. In this regard, the rate of the pound sterling fell sharply and in the course of trading fell to a historic low of $ 1.054 per pound. As a result, Truss, who was elected in September, was forced to resign after only 44 days in office.