How to explain the spectacular collapse of the pound sterling in the United Kingdom?

“In 1995, Kwasi Kwarteng made headlines after he used the word ‘fuck’ twice on a British game show.” Twenty-seven years later, the young Cambridge student became Conservative Chancellor of the Exchequer. “And the same word, fuck, resounded in all trading rooms”September 26 it creaks Financial Times.

On this Black Monday, the British pound yo-yoed and fell to its all-time low against the dollar ($1.035 to a pound). Before it rises significantly. “This is to say how much confidence in the British economy has been shaken: while Italy woke up on the same day to put the far right in government for the first time since the war, which worried the several investors, it was the economic turnaround that taken. by the new British government”regrets the economic daily newspaper.

Encourage Britons to work harder

At the beginning of this panic wind, Kwasi Kwarteng presented on Friday 23 September a “mini-budget” with maximum consequences. A practical application of new Prime Minister Liz Truss’s very “Thatcherite” and pro-free market beliefs: cut taxes to boost sluggish UK growth. At the same time as protecting the population from the dizzying increase in electricity and heating prices.

In practice, this approach resulted in a freeze in energy prices at an estimated cost of £60bn. A drastic measure, but almost completely overshadowed by the government’s decision to cut income tax, lower the tax rate for the richest, cancel the increase in social security contributions and finally abandon the increase in the corporate tax rate from 19 to 25% – decided by the previous executive, led by Boris Johnson. “Revisit

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