Finance Minister Kwasi Kwarteng has been criticized for its mini-budget announced last week, which has been criticized for relying on trickle-down economics that benefit the highest earners. Since the announcement, markets have spiraled downward, with the pound plunging to its lowest level against the dollar and into its fifth worst one-day decline in 40 years.
The Chancellor’s plan for economic growth by cutting taxes by £45bn without funding means government borrowing would increase significantly, deterring investors.
Despite warnings from the International Monetary Fund to re-examine the tax-cutting budget, Truss and her Treasury chiefs continue to support their plan, blaming the Bank of England for the mortgage hikes.
The IMF spokesman said: “Given the heightened inflationary pressures in many countries, including the UK, we do not recommend large and unfocused fiscal packages at this time, as it is important that fiscal policy does not work in the opposite direction to monetary policy. ”
The Bank of England also intervened, saying it was ready to raise interest rates to bring back the stability of the pound and curb inflation.
The BoE was also forced into further emergency measures to stop a revolving pension fund.
The prime minister appeared on local radio stations to answer questions from the public about the economic situation, prompting listeners to make scathing remarks about the prime minister and her economic policies.
Much of the conversation was dominated by those who wanted to learn more about the mini-budget’s impact on mortgages that the Prime Minister was talking about.
Robert Peston criticized the Treasury’s and Prime Minister’s response, saying “they are refusing to participate” after he blamed the mortgage rate on the Bank of England.
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Since the Chancellor’s announcement last week, more than 40 percent of mortgages have been withdrawn from sale due to the impact on the market.
An inquirer on Radio Kent told the Prime Minister: “What the hell were you thinking?
“How can we ever entrust our economy to the conservatives again…are you ashamed of what you’ve done?”
Ms Truss replied that the plan was necessary and “the right thing to do,” which she later confirmed on Twitter, adding: “Reducing taxes will boost investment, create jobs and opportunities for all.”