The International Monetary Fund sounds the alarm on the British government’s tax plan: ‘increasing inequality’

The International Monetary Fund, which oversees financial stability in the world and lends to countries in need, rarely expresses such direct and frank criticism of a Western country with such a large economy as the United Kingdom.

In addition to the temporary cap on energy bills, the Truss government is primarily focused on large corporate tax cuts and higher incomes. The highest rate of income tax (i.e. higher income) should be abolished and the transfer tax on homes reduced.

Rewards for bankers

The fear is that the UK’s wealthiest people will eventually benefit from the subsidy measures. An IMF spokesperson said: “The nature of the UK’s actions is likely to increase inequality.” For example, Truss also wants to allow unlimited bonuses to bankers again, because she believes that the competitive position of London banks will become stronger then.

The support package from the state Truss government will cost at least 60 billion pounds over the next six months, about 67 billion euros, but must generate money after that. The UK is willing to borrow tens of billions of dollars more for this. “Given high inflation in many countries, including the UK, we do not recommend large, untargeted fiscal packages at this time,” the IMF criticized.

According to the International Monetary Fund, the new British budget conflicts with the monetary policy of the British Central Bank, which should keep the British pound stable. This is not okay: Sterling is in severe weather. As a result, life in the UK will become more expensive as the cost of imported products, including oil and gas, continues to rise.

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Megan Vasquez

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