Sunak goes to austerity and raise taxes

New British Prime Minister Rishi Sunak will erect an additional fiscal buffer. To reduce the huge UK budget deficit, according to British media, Sunak wants to raise a total of 50 billion pounds (58 billion euros) through tax cuts and increases.

Sunak and his finance minister Jeremy Hunt want to create additional leeway over the £35 billion (€40 billion) tax gap. A government official, who wished to remain anonymous because plans have not yet been announced, said the economic package should gain more credibility with investors.

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Stephen Copman, an economist at Rabobank who specializes in British economics, said earlier in BNR that Sunak cannot escape these kinds of measures, although Sunak will not be a fan of tax increases. “He should take advantage of the honeymoon period and quickly come up with a clear fiscal plan,” Koopman says.

Real plans come later

Budget plans were already supposed to be released next Monday. But publication has been postponed to November 17. Financial markets are anxiously awaiting plans. Sunak and Hunt will then explain how they want to reduce government debt and restore financial stability.

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Under Liz Truss, Sunak’s predecessor, great discontent and turmoil arose in the financial markets over her controversial budget plans. She wanted to implement big tax cuts and the government would also spend a lot more. For this, Truss wanted to borrow a lot of money, which threatened to increase the budget deficit even more. That failed economic policy cost her the premiership last week.