UK’s Truss sticks to economic plan as party frets

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British Prime Minister Liz Truss arrives at an economics conference held in Birmingham, England on Saturday. (AP Photo/Rui Vieira)

LONDON (AP) — British Prime Minister Liz Truss said Sunday she could have done a better job of “laying the groundwork” for her package of unfunded tax cuts, but insisted she would press ahead. an economic plan that has wreaked havoc on the financial markets. and weakened the country’s public finances.

Truss acknowledged the UK is facing “a very turbulent and stormy time”, but said its policies would lead to a “high growth, low tax economy” in the longer term.

The comments are unlikely to calm Truss’ Conservative Party, which opens its annual four-day conference in the central England city of Birmingham on Sunday amid plummeting polls and growing public discontent.

Truss took office less than a month ago, promising to radically reshape Britain’s economy to end years of sluggish growth. But the government’s September 23 announcement of a stimulus package including 45 billion pounds ($50 billion) in tax cuts, to be paid for by public borrowing, sent the pound plummeting to a record low by against the dollar.

The Bank of England was forced to intervene to support the bond market, and fears that the bank would soon raise interest rates caused mortgage lenders to withdraw their cheapest offers, causing unrest for home buyers. houses.

“I learned from that,” Truss told the BBC. “I will make sure in the future that we do a better job of preparing the ground.”

Truss stuck to her insistence that Britain’s economic problems were part of a global spike in inflation and energy prices spurred by Russia’s invasion of Ukraine.

In a bid to calm market turmoil, Truss and his finance minister, Chancellor of the Exchequer Kwasi Kwarteng, announced they would set out a medium-term fiscal plan on November 23, alongside the Independent Office’s economic forecast for budgetary responsibility. .

Many economists and many conservatives say this means more weeks of economic turbulence are ahead. Michael Gove, who served as chief minister in previous Tory governments, said the announcement “will have to be brought forward” and parts of the economic package will have to be scrapped.

Gove said there was “insufficient awareness at the top of government of the scale of change required”.

Many Tory lawmakers fear a leader chosen to replace Prime Minister Boris Johnson on his economic growth promises could put the party on a losing streak in the next general election, due by 2024. opinion suggest that the opposition Labor party opens a substantial lead.

Some delegates arriving for the Birmingham conference were gloomy about the future of the party, in power since 2010.

“I think it’s going to be a hectic conference, no doubt,” said Daniel Pitt, a party member from Erewash in central England. “The Prime Minister must try to stabilize the ship.”

Truss said she would ‘do what I can to win the hearts and minds of my Conservative Party colleagues’ – but that doesn’t appear to include a change of course.

Truss said she would not give up on the most unpopular part of her economic agenda, a decision to scrap the top 45% income tax rate paid on income above 150,000 pounds ($167,000) per year. And she wouldn’t say whether to cut social and public services to pay lower taxes.

When asked if the Cabinet as a whole had decided to cut the top rate of tax, Truss replied “no… It was a decision taken by the Chancellor”.

“I think politics has focused too much on optics or how things look,” Truss said. She said she was confident her policies would grow the economy by 2.5% a year – a target the UK has missed in years.

Labour’s economics spokeswoman Rachel Reeves accused the Conservative government of ‘having some sort of crazy experiment with the UK economy’ and ignoring the ‘anxiety and fear’ felt by million ordinary people.

“The idea that the trickle-down economy will somehow generate the 2.5% growth we all want to see is for the birds,” Reeves told the BBC.

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