IMF gives damning verdict on Britain’s tax cuts
LONDON — The new economic measures laid out by the U.K. government “will likely increase inequality,” according to the International Monetary Fund.
While the fiscal package — which included hefty tax cuts for Britain’s highest earners — aims to help families and businesses handle the energy shock, the IMF does “not recommend large and untargeted fiscal packages at this juncture,” a spokesperson said in a statement late Tuesday.
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The organization also looked ahead to the next full budget announcement, set to be laid out by Finance Minister Kwasi Kwarteng on Nov. 23, saying it gives the U.K. government “an early opportunity … to consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high income earners.”
The “mini-budget” announced by the new U.K. government on Friday was a “new approach for a new era focused on growth,” according to Kwarteng, and included canceling the planned increase in corporation tax from 19% to 25% and scrapping the 45% income tax bracket paid on incomes over ?150,000 ($160,000), bringing the top rate down to 40%.