Jeremy Hunt’s intervention which has seen the reversal of Prime Minister Liz Truss’s economic plans has ‘stopped the economic bleeding’ of Britain, according to a top Westminster think tank.
In a statement, Patrick Sullivan, lead economist at Parliament Street praised the new Chancellor for his decisive action to scrap many of the fiscal commitments which spooked financial markets. Sullivan said, “Families up and down the country owe a debt of gratitude to Jeremy Hunt for stopping the economic bleeding but that doesn’t mean all is forgiven for Liz Truss who is still the person who crashed the economy in the first place and caused so many sleepless nights for hard working Brits.”
Changes announced by Hunt on Monday included the 20p basic tax rate would remain in place indefinitely, whilst changes to dividend taxes, a VAT-free shopping scheme and a freeze on some alcohol duties would all be reversed.
But the biggest surprise came when the chancellor said he would no longer guarantee energy prices for the next two winters and that more specialist measures would replace the universal guarantee from next spring after a Treasury review. This announcement means the average annual energy bill will rise to more than £4,000 from April, according to the sector’s leading forecaster.
City entrepreneur Khalid Talukder, Co-Founder of DKK Partners said, “The Chancellor’s announcements mark a welcome return to sensible economics which should protect the UK from the adverse and self-inflicted financial shocks seen over the last few weeks.
“His corrective actions in particular are particularly positive, due to the falling UK gilts yield which in turn has lowered the rate of UK borrowing from the highs seen last week.
Talukder continued, “That being said, the new chancellor still has a big job on his hands, and we are not out of the woods yet, but at least we have a clearer path on working our way to recovery.”
Meanwhile the independent Institute for Fiscal Studies said the estimated £32bn tax increases would not be enough on their own to undo the damage caused by the “debacle of the past few weeks”. Paul Johnson, the thinktank’s director, said the chancellor’s decision to scrap most of the tax cuts announced last month was welcome but would not be enough “to plug the gap in the government’s fiscal plans”.