US President Joe Biden has called embattled British Prime Minister Liz Truss’ abandoned tax cut plan a “mistake”.
US President Joe Biden has called embattled British Prime Minister Liz Truss’ abandoned tax cut plan a “mistake” as the governor of the Bank of England warned that interest rates may need to rise in the short term following the financial turmoil caused by the British government’s mini-budget.
“I wasn’t the only one that thought it was a mistake,” Biden said. “I disagree with the policy, but that’s up to Great Britain.” As interest rates soar and the cost of living crisis deepens, brokers have warned buyers and existing home owners who want to remortgage will soon have no choice but to take out long-term deals.Truss was battling to keep her job on Saturday after shredding her economic growth plan on Friday, which included dumping plans to reverse a rise in corporate tax rates.
UK government borrowing costs reached a 20-year high last week, with 20- and 30-year gilt yields hitting their highest since 2002 at 5.195 per cent and 5.1 per cent respectively. Bailey said government fiscal policy had been followed by some “some violent moves in the last few weeks” in UK markets, which had triggered the decision to unleash a dramatic £65-billion bond-buying scheme amid a “material risk” to UK stability and pension markets.
“Senior civil servants are now openly talking about her going,” one Whitehall source told the paper. “They think she’s had it.”
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