Kwarteng’s tax cuts to spark £411bn borrowing surge, claims think tank

Kwarteng’s tax cuts to spark £411bn borrowing surge, claims think tank

Good morning.

All eyes are on Kwasi Kwarteng today as he prepares to unveil a string of tax cuts in his mini-Budget.

Economists at the Institute for Fiscal Studies have said today’s announcements are likely to amount to “the biggest tax-cutting fiscal event since Nigel Lawson’s budget of 1988.”

The Chancellor has already confirmed that the recent rise in National Insurance will be scrapped from November.

Other measures expected include scrapping the planned increase in corporation tax and slashing stamp duty, as well as ending the cap on bankers’ bonuses and creating new low-tax investment zones.

There could be more, too, with Mr Kwarteng set to announce two “rabbit out the hat” policies that haven’t been reported.

5 things to start your day 

1) Borrowing costs surge as Bank of England forges ahead with bond sale  Plus: Bailey bets that Truss’s energy bailout will save Britain from rocketing inflation 

2) Net zero rules watered down in scramble to boost North Sea drilling  Rees-Mogg weakens climate ‘checkpoint’ regulations as part of efforts to expand production 

3) Director of The Guardian quits in protest at ‘imperial’ editor’s choice of chief executive  Current boss Anna Bateson’s appointment was pushed by editor Katharine Viner

4) BT demands staff return to the office  Telecoms giant says new approach is “fundamental to the success of the business”

5) Pubs ditch cask ale for kegs of fizzy craft beer as landlords fear downturn in visits  Sales across the hospitality sector remain well below pre-pandemic levels, consultant suggests

What happened overnight 

 Asian markets fell again on Friday as part of a global sell-off fuelled by recession fears after central banks around the world ramped up interest rates to fight decades-high inflation.

Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Manila all dropped.

Coming up today

  • Economics: Mini Budget (UK), manufacturing PMI (UK, US, EU), services PMI (UK, US, EU), composite PMI (UK, US, EU)
  • Corporate: European Opportunities Trust, Smiths Group (full-year results); Biffa, Investec (trading update)

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