Britain’s economy has wobbled along since the financial crisis more than a decade ago, in 2008, with weak productivity and low pay. Recently, it lost its place as the world’s fifth-largest economy to India.While the global economy faces a slowdown, Britain has many unique challenges. Brexit has erected barriers to Britain’s largest trading partner, the European Union, deterring business investment and breaking a connection to a large pool of workers. The overburdened National Health Service, pushed to the brink by the pandemic, has an immense backlog of patients needing care, keeping many of them out of work. And now inflation, running near a 40-year high, is squeezing household budgets.This is the quandary that Prime Minister Liz Truss of Britain says has forced her to make “controversial and difficult decisions” to put Britain on a path to higher growth. Within weeks of taking office, she and Kwasi Kwarteng, the chancellor of the Exchequer, made their big pitch, which was heavy on tax cuts and deregulation and echoed the policies of Margaret Thatcher and Ronald Reagan.On Monday, after a backlash from investors, economists and members of his own party, Mr. Kwarteng reversed one of the government’s proposals, deciding against abolishing the tax rate of 45 percent on the highest earners. That plan had drawn a lot of criticism, but proposals for other tax cuts worth tens of billions of pounds remain intact, as the government insists it is on the right path.“I know the plan put forward only 10 days ago caused a little turbulence,” Mr. Kwarteng told members of the Conservative Party at their annual confer …
Britain’s Economic Experiment Stumbles at the Start – The New York Times
