On Friday Kwasi Kwarteng delivered his first budget which for many has been met with much anger after what the “government has announced is too little, too late.”
The budget has been called “reckless” as equity markets everywhere are down right now, and the pound plummeted to a 37-year low after he announced there will be billions of pounds of tax cuts.
The FTSE plummeted to its lowest in two months and the equity markets were also affected as sterling fell by 0.89% to $1.115 on Friday morning.
Read more on the mini budget:
The pound plummets to a 37 year low following the Chancellor’s mini budget with a warning it could fall further
Basic rate of income tax to be cut and top rate of income tax scrapped
Duty rates for beer, cider, wine, and spirits axed
UK stock market reacts to interest rate hike, risks remain
Philip Dragoumis, owner of London-based wealth manager, Thera Wealth Management said, “This budget is fiscally reckless. It’s Trussmoronics not Trussonomics. There has been no independent assessment or costing from the Office of Budget Responsibility.
“If you cut taxes while at the same time spending billions on energy subsidies, and just put the bill onto government borrowing, people will not spend their extra money because they know that the bill is coming further down the line.
“Extra government borrowing and higher bond yields crowd out growth. Markets will lose confidence in UK assets, bond yields will continue to rise and Sterling will continue to fall.
“Also, how will less stamp duty help first-time buyers when mortgage affordability is decreasing as interest rates go up?”
Serena Aranir, manager at Balham-based The Kebab Company had this to say, “What the government has announced is too little, too late. This should have all been done before but yet again they are behind the curve.
“We needed tax cuts and rates paused for businesses months ago but now many of us have gone bust or are not far from it.
“Couple this with the rise in raw materials, energy and the staffing crisis, you have a toxic mix meaning it’s no longer viable to run a retail business in this country. It won’t be long before we are back to the 90s with derelict ghost towns.
“Instead, the Government wasted billions on the wrong things including on unneeded infrastructure changes and under-utilised cycle lanes.
“This money could have been put to much better use but of course it was wasted and now many business are on the brink of collapse.”
Kwarteng announced in the House of Commons that the government will remove the cap on banker’s bonuses which has been described as “beyond irresponsible.
David Robinson, chartered wealth manager at London-based Wildcat Law said, “The removal of the cap on bankers’ bonuses is beyond irresponsible.
“It’s as if everyone has forgotten why the restrictions were put in place, namely because bonuses were found to be a contributing factor to the banks’ practices that directly led to the Global Financial Crisis.
“Bonuses promote short-term behaviours and hence risk taking to generate profit as quickly as possible, with no implications for sustainability.
“As someone who spent years repairing some of the damage done in 2008, it is very concerning that just at the point the banks are back on a stable footing, the government is removing many of the checks and balances put in place to keep them there. Large cash bonuses do nothing to promote stable growth, they simply increase the potential reward for taking risks.
“Arguments that the accountability rules will prevent this seem very hollow when we look at the almost non-existent enforcement of these rules with regards to senior individuals.”
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