“In 1995, Kwasi Kwarteng made headlines after he used the word ‘fuck’ twice on a British game show.” Twenty-seven years later, the young Cambridge student became Conservative finance minister. “And this same word, fuck, resounded in all the trading rooms”September 26, squeaks the Financial Times.
On this Black Monday, the pound sterling played yo-yo, falling to its all-time low against the dollar (1.035 dollar for one pound). Before rising significantly. “It is to say how much confidence in the British economy is shaken: while on the same day Italy woke up to putting the far right in government for the first time since the war, which worried the more investors, it was the economic turn taken by the new British government”deplores the financial daily.
Encouraging Brits to work harder
At the origin of this wind of panic, a “mini-budget” with maxi-repercussions presented Friday, September 23 by Kwasi Kwarteng. A practical application of the very “Thatcherite” and pro-free market creed of the new Prime Minister Liz Truss: cut taxes to boost the sluggish growth of the United Kingdom. While protecting the population against the dizzying rise in electricity and heating prices.
In practice, this approach resulted in a freeze in energy prices, at an estimated cost of £60 billion. A drastic measure, but almost entirely overshadowed by the government’s decision to cut income taxes, lower the tax rate on the wealthiest, cancel the increase in social security contributions and, finally, abandon the rise in the corporate tax rate of 19 to 25% – decided by the previous executive, led by Boris Johnson. “Revisiting