January 30, 2023: -British Finance Minister Jeremy Hunt on Friday signalled he is forcing ahead with tax hikes while the requirement to grow Brexit into a “catalyst” for U.K. growth.
“The best tax cut currently is a cut in inflation,” Hunt stated in a speech addressed to tech giants, which include Amazon, Google and Meta, as he is looking to dispel economic “gloom” in the U.K.
Optimism in the U.K. financial is not in “short supply” in recent months, Hunt stated.
Hunt told companies they were necessary for the U.K. outlook but further said that “Britain is important for your future too” and questioned their support to make the country “the world’s upcoming Silicon Valley.”
The finance minister is stressing the importance of making the U.K. a place where firms want to do business.
He said that Britain needs to have “nothing less than the competitive tax regime of a lot major country,” despite restoring the planned increase in corporation tax from 19% to 25% after former Finance Minister Kwasi Kwarteng scrapped it.
According to Susannah Streeter, senior investment and business analyst at Hargreaves Lansdown, Hunt’s previous comments were more about being better the image of Britain’s economic circumstances than supplying new policies.
″Jeremy Hunt shrugged off his firefighter view for that of a construction worker, determined to support rebuilding Britain’s economy. But there is zero quick dry concrete available providing an immediate solution to the stagnation the U.K. is languishing under,” Streeter wrote in an analyst note.
She added that detail is “sorely lacking,” saying, “the architects of this plan are unsure how it will be paid for.”
The British pound decreased 0.25% against the dollar, hitting $1.237 following the speech. It is becoming a few of its losses from when Hunt started but pulled away from the six-week high that struck on Thursday.
Hunt’s speech starts as the U.K. inflation rate reached 10.5% in December, above the Bank of England’s aim of 2%. The bank next meets to decide on monetary policy on February 2.