Trussonomics Has Failed at the First Hurdle

Summary:

The markets brutally rejected Chancellor Kwasi Kwarteng’s 'fiscal event' on Friday September 23rd. As well as a large and untargeted energy bailout of households and businesses, Kwarteng announced big unfunded cuts to income tax, especially for higher earners, and reversed planned rises in payroll and corporation taxes. Markets responded by selling sterling and UK government bonds.  This article argues that a full-blown UK financial crisis is unlikely, but if Truss doesn’t u-turn on her unfunded tax cuts, it will be hard to avoid a recession.

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