Thursday newspaper round-up: Stealth tax, mortgage rates, UK credit rating

by | Oct 6, 2022

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Millions of households are facing a “stealth” tax raid under Liz Truss’s government despite her promise to support workers through the cost-of-living crisis by lowering their tax bills, Britain’s leading economic thinktank said on Wednesday. The Institute for Fiscal Studies (IFS) has calculated that for every £1 given to workers by cutting headline tax rates, £2 was being taken away through a freeze on the level at which people begin paying tax on their earnings. – Guardian
The average rate on a new two-year fixed mortgage has risen above 6% for the first time since 2008, according to data that will intensify concern about the crisis in the home loans market. News that the typical new rate had climbed to 6.07% came the day before the chancellor, Kwasi Kwarteng, was due to meet with executives from Britain’s biggest banks to discuss the impact of the financial markets turmoil on mortgages and availability. – Guardian

Fitch has threatened to downgrade the UK’s credit rating in the wake of spending plans set out by Liz Truss and Kwasi Kwarteng in the mini-Budget. Fitch said the country’s credit rating remained “AA-” but said there had been a “material change” which required it to update investors. – Telegraph

The Treasury will impose an additional £21bn of income taxes despite Liz Truss’s “tax-cutting” mini-Budget, a detailed analysis released on Thursday has revealed. The average household will be £1,450 per year worse off as a result of the stealth raid, according to the Institute for Fiscal Studies (IFS) think tank. – Telegraph

A City solicitor who told a client to “burn” a secure messaging system in a dispute with Ocado has avoided jail after being found in contempt of court. Raymond McKeeve, a former partner at the London office of US law firm Jones Day, was yesterday fined £25,000 and ordered to pay £600,000 costs. – The Times

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