In the United Kingdom, the economic situation is dire. On Friday, the government presented a modest budget to stimulate the economy, but the effects of the announcement are far from expected. Pound sterling fell to an all-time low against the dollar, although it has already recovered slightly. Interest on public debt continues to rise.
It’s the biggest tax cut in 50 years: From IRS to IRC, through stamp duty for home buyers. All with the aim of stimulating the economy.
The intention may have been good, but the markets’ response set off alarm bells: the pound collapsed. He later recovered, but the damage was done.
Interest on public debt is also increasing. In January they were not above 1%, now they are above 4% – especially since the government’s plan foresees that tax cuts will be offset by the use of debt, which increases the public deficit.
This Monday, the finance minister chose to ignore the questions. On Sunday I had said that markets are not a priority.
In the midst of the crisis, the British government and the Bank of England are pulling in opposite directions: one is calling for spending, while the other is using high-cost loans to control inflation, which is already 10% – an unacceptable value. Central Bank..
The bank said in a statement on Monday that it would not hesitate to raise interest rates to bring inflation back to 2%.
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