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Re: Truss and the Brit mortgage market
https://www.bbc.co.uk/news/business-63051702
The UK government should reconsider its plan for tax cuts, the International Monetary Fund has said, warning that the measures are likely to fuel the cost-of-living crisis.
In an unusually outspoken statement, the IMF said the proposal would be likely to increase inequality and add to pressures pushing up prices.
Markets have already raised alarm over the plans, sending the pound plunging.
The government says the measures will kickstart economic growth.
Chancellor Kwasi Kwarteng unveiled the country's biggest tax package in 50 years on Friday, funded by the government borrowing tens of billions of pounds.
The IMF, which works to stabilise the global economy, said it understood the package aimed to boost growth via tax cuts, but it said that it could boost inflation, which the UK's central bank is trying to bring down.
"Furthermore, the nature of the UK measures will likely increase inequality," it said.
The UK government proposals would scrap the top rate of income tax, and end a cap on bankers' bonuses, among other measures.
The announcement on Friday sparked days of financial turmoil, as investors dumped the pound and UK debt, and some of the country's biggest lenders suspended mortgage deals amid the uncertainty.
The Treasury said: "We are focused on growing the economy to raise living standards for everyone."
It added that Mr Kwarteng was due to publish his medium-term fiscal plan on 23 November, which would include ensuring that UK debt falls as a share of economic output in the medium term.
In an unusually outspoken statement, the IMF said the proposal would be likely to increase inequality and add to pressures pushing up prices.
Markets have already raised alarm over the plans, sending the pound plunging.
The government says the measures will kickstart economic growth.
Chancellor Kwasi Kwarteng unveiled the country's biggest tax package in 50 years on Friday, funded by the government borrowing tens of billions of pounds.
The IMF, which works to stabilise the global economy, said it understood the package aimed to boost growth via tax cuts, but it said that it could boost inflation, which the UK's central bank is trying to bring down.
"Furthermore, the nature of the UK measures will likely increase inequality," it said.
The UK government proposals would scrap the top rate of income tax, and end a cap on bankers' bonuses, among other measures.
The announcement on Friday sparked days of financial turmoil, as investors dumped the pound and UK debt, and some of the country's biggest lenders suspended mortgage deals amid the uncertainty.
The Treasury said: "We are focused on growing the economy to raise living standards for everyone."
It added that Mr Kwarteng was due to publish his medium-term fiscal plan on 23 November, which would include ensuring that UK debt falls as a share of economic output in the medium term.
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