Possible cuts to fix UK budget

October 20, 2022 - UK finance minister Jeremy Hunt has reversed most of former Prime Minister Liz Truss’ £45 billion (€52bn) of unfunded tax cuts. He needs to raise a further £40bn (€46bn) to repair public finances.

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Earlier this week, Hunt pledged to enact steep new spending reductions and rein in an energy-price freeze while hinting that more cuts are on the way.

The good news is that the financial markets have not taken further fright at the chaos in the UK’s governing party. Bond yields eased, the pound rallied, and a sense of crisis dissipated -- at least for the moment.

The number of Tory MPs publicly calling for Truss to quit swelled to 14 after a catastrophic 24 hours for her premiership.

On Wednesday (October 19), Truss abruptly fired Home Secretary Suella Braverman for a national-security breach. Braverman lashed out at Truss’s “tumultuous” premiership as she resigned and accused the Government of “breaking key pledges,” including immigration policy. Her departure came just five days after Truss sacked Kwasi Kwarteng as chancellor.

Prime Minister Liz Truss resigned on Thursday. She confirmed a leadership election to decide the UK’s next prime minister will be completed within a week.