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Finance Minister Jeremy Hunt has implored companies to play a crucial role in British economic growth as the country angles for tax hikes.
British Finance Minister Jeremy Hunt recently indicated that he would push ahead with the country’s tax hikes. The Chancellor of the Exchequer also pledged post-Brexit reforms for growth in the United Kingdom.
On Friday, Hunt said in a speech to tech giants, “The best tax cut right now is a cut in inflation.” The British Finance Minister also intimated companies like Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOGL), and Meta (NASDAQ: META) on dispelling UK economic gloom. According to Hunt, there is a need to develop Brexit in such a way that it spurs economic growth in the country.
Amid his stated agenda regarding British tax hikes, Hunt mentioned that optimism in the European nation has been low recently. As a result of this optimistic “short supply,” the UK politician implored companies to help make the nation “the world’s next Silicon Valley.” According to Hunt, these companies were essential for Britain’s economic outlook and instrumental to its growth plans. However, the high-ranking British Cabinet member also suggested a mutually beneficial relationship between Britain and the corporations. In his Friday address, Hunt played up the market potential of the UK, saying, “Britain is vital for your future too.”
Finance Minister Explains Tax Hikes Necessary to Pull British Economy Out of Inertia
While stressing the importance of making the UK an appealing business hotspot, Hunt underscored the need for a favorable tax structure. According to the Chancellor of the Exchequer, the country needs to attain “nothing less than the most competitive tax regime of any major country.” However, the British senior government official intends to angle for said tax regime amid the restoration of the planned rise in corporation tax from 19% to 25%. Hunt’s short-tenured predecessor Kwasi Kwarteng previously scrapped the corporation tax increment plans while in office.
Kwarteng was a Cabinet member of the short-lived Liz Truss government between September and October last year. While serving as Finance Minister between September 6th and October 14th, 2022, many of his policies proved unpopular with the British parliament and populace. These policies, including Kwarteng’s “mini-budget’s” economic policies and tax cuts, ultimately resulted in his dismissal from office. Following Kwarteng’s ousting, Truss appointed Hunt, who retained his role as Chancellor under Rishi Sunak following her resignation.
After Hunt’s’ reform’ speech, the British pound sank 0.25% to $1.237 against the US dollar. The sterling had initially recouped some of its losses from when Hunt’s speech began but ultimately regressed from Thursday’s six-week high.
In September, the pound sank to its lowest level against the dollar in 37 years amid several macroeconomic headwinds. These constraints included surging inflation, the highest among all G-7 nations, looming recession, and tax cuts.
At the time, the British currency slumped to a low of $1.135 against the US greenback before rebounding slightly to $1.1378. A few days later, the pound would further slide to $1.1029 per dollar and an all-time low of $1.03 to a dollar.