Liz Truss’ ‘trickle-down economics’ is dead. Now the UK faces an uncertain future – CNBC

by | Oct 18, 2022 | Financial

Britain’s Prime Minister Liz Truss holds a press conference in the Downing Street Briefing Room in central London on Oct. 14, 2022.Daniel Leal | Afp | Getty ImagesLONDON — Just six weeks into U.K. Prime Minister Liz Truss’ tenure and the political future of yet another Conservative leader looks to be in jeopardy.Truss on Monday said she was sorry for mistakes made by her government and accepted responsibility for “going too far and too fast” with her contentious “trickle-down” economics approach.The “trickle-down economics” theory is that tax breaks and benefits for the wealthy will eventually trickle down to everyone else. The approach has been sharply criticized by U.K. political opponents — and even U.S. President Joe Biden — at a time when Britain faces a deepening cost-of-living crisis.The apology from Truss — whose “Trussonomics” policy stance has been likened to that of her political idols Ronald Reagan and Margaret Thatcher — followed one of the most extraordinary U-turns in modern British political history.Newly installed Finance Minister Jeremy Hunt on Monday dramatically ripped up almost all the tax cuts Truss had promised, cut short her flagship energy policy and made clear there would be cuts in public spending to come — something Truss said she was “absolutely” not planning to do just last week.The volte-face leaves Truss’ economic vision in tatters, with five of her own Conservative lawmakers now openly calling for her to resign.Truss has insisted she will remain in post, telling the BBC that she intends to brush off criticism from across the political spectrum and lead the Conservatives into the next general election.The U.K.’s new Finance Minister Jeremy Hunt made big fiscal announcements Monday.House of Commons – PA Images / Contributor / Getty ImagesKallum Pickering, senior economist at Berenberg Bank, said in a research note that Hunt putting an end to “Trussonomics” meant it was now likely t …

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