Following the abandonment of the plan to abolish the maximum income tax rate on October 3, the British government made major policy adjustments under continuous pressure on October 14. British Prime Minister Elizabeth Truss announced on the same day that the company tax increase plan announced by the previous government will be retained, which will bring the government 18 billion pounds (1 pound, about US $1.118) of revenue every year. When attending the press conference on September 14, Truss said that the scale and speed of the large-scale tax reduction policy announced by the British government in September exceeded market expectations. At present, the government must strengthen fiscal discipline to calm the market. The British government will take the necessary measures to ensure that medium-term debt decreases, but the growth of public expenditure will be slower than previously planned. Truss said that the British economy with low taxes, high wages and high growth is still her administrative goal, and her focus is to ensure the stability of the British economy. Jeremy Hunt, the new Finance Minister, will announce the medium-term fiscal plan at the end of this month, and continue to promote the energy price protection measures for households and enterprises previously announced by the government. At the beginning of 2021, the British government announced that from April 2023, the tax rate of large and profitable enterprises will be increased from 19% to 25%, which is the first time that the UK has raised corporate tax since 1974. In September this year, the British government announced large-scale tax cuts, including the cancellation of the corporate tax increase plan to encourage investment. The massive tax reduction policy in Britain caused financial market shocks, and the exchange rate of sterling against the US dollar once hit a record low. In the face of fierce market fluctuations and external doubts, the UK Ministry of Finance announced on the 3rd of this month that it would give up its previous plan to abolish the 45% maximum income tax rate. On the 10th, the Ministry of Finance also announced that it would advance the release date of the medium-term financial plan and other information from November 23 to October 31. To stabilize the bond market, the Bank of England announced on September 28 that it would temporarily purchase long-term British government bonds from now to October 14. On the 10th, the Bank of England announced that it would increase the daily limit of bond purchases. On the 11th, the Bank of England again upgraded its measures to include inflation linked government bonds in its bond purchase plan. However, it is feared that the chaos in the bond market will continue after the central bank's intervention measures ended on the 14th. Tosten Bell, CEO of Resolution Foundation, a British think-tank, said that nearly half of the tax reduction measures with an initial scale of 45 billion pounds had been cancelled so far, but the remaining tax reduction measures and the increasingly depressed economic prospects would still create difficulties for government financing. The recent market turmoil shows that economic policy making is not a game. (Liu Xinshe)
Edit：Yi Bing Responsible editor：Wei Li Bin
Source：XinhuaNet
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