London Daily

Focus on the big picture.
Sunday, Jun 01, 2025

UK Finance Minister Devises "Credible Plan" To Reduce Debt

UK Finance Minister Devises "Credible Plan" To Reduce Debt

Last month's controversial tax-slashing plans, which will dramatically increase government borrowing, went further than many expected.

Britain's under-fire finance minister Kwasi Kwarteng has promised to unveil "a credible plan" to lower government debt as he defended his contentious mini-budget that led to market turmoil.

Last month's controversial tax-slashing plans, which will dramatically increase government borrowing, went further than many expected, abolishing the top rate of income tax and lifting a cap on bankers' bonuses.

It led to immediate upset in the financial markets, with the pound dropping to its lowest ever level against the dollar.

Kwarteng insisted his ministry will next month unveil a "medium-term fiscal plan" that will set out a path to reducing borrowing, alongside "new fiscal rules and a commitment to spending discipline".

In an article for the Daily Telegraph published late Friday, he noted a full forecast from the country's fiscal watchdog, the Office for Budget Responsibility (OBR), would also accompany the plan on November 23.

The lack of an OBR forecast has been cited as one of the reasons for the market tumult that followed the September 23 release of the mini-budget, which cut taxes for the wealthiest amid a cost-of-living crisis.

The turmoil forced the Bank of England to make an emergency intervention to stabilise the situation, amid fears of a collapse in UK pension funds.

Opposition politicians, independent analysts and even some Tory lawmakers have assailed the plans as reckless and counter-productive.

But Kwarteng has insisted the package is essential to return the UK, which is tipped to fall into recession imminently, to economic growth.

"Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice," he reiterated in his Telegraph article.

'Iron grip'


However at the same time the article was published online, the S&P ratings agency said it had revised its outlook for the UK from "stable" to "negative" following the fallout from the mini-budget.

It cited the risk that "the UK's economic growth turns out weaker due to further deterioration of the economic environment, or if the government's borrowing costs increase more than expected".

It comes days after rival ratings agency Moody's warned that Kwarteng's fiscal strategy was "credit negative" and could "permanently weaken the UK's debt affordability".

Prime Minister Liz Truss has also faced searing criticism over the economic package.

After nearly a week of silence, she faced a gruelling round of BBC radio and regional television interviews Thursday, before penning her own newspaper article in The Sun published overnight.

In it, she conceded for the first time that the plans had prompted "short-term disruption", but vowed to press on with them and handle public money with "an iron grip".

A poll Friday found half of Britons think she should resign -- less than four weeks after taking office -- while support for the mini-budget has been in the single digits in some surveys.

Newsletter

Related Articles

0:00
0:00
Close
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
×