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In U.K. Fallout, Lessons for a World Facing Harsh Economic Realities

By Patricia Cohen. NYT. OCTOBER 15, 2022

Lunes 17 de octubre de 2022, por Carlos San Juan

Government leaders in the West are struggling with rising inflation, slowing growth, and anxious electorates worried about winter and high energy bills. But Liz Truss, Britain’s prime minister, is the only one who devised an economic plan that unnerved financial markets, drew the ire of global leaders and the public and undermined her political standing.

On Friday, battered by savage criticism, she retreated. Truss fired her top finance official, Kwasi Kwarteng, for creating precisely the package of unfunded tax cuts, billion-dollar spending programs and deregulation that she had asked for.

She reinstated a scheduled increase in corporate taxes to 25% from 19%, a rise she had previously opposed. That announcement came on top of backtracking last week on her proposal to eliminate the top 45% income tax on the highest earners. The prime minister, in office a little over five weeks, also promised that spending would grow less rapidly than proposed, although no specifics were offered.

The drama is still playing out, and it’s unclear if the Truss government will survive.

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