Britain’s historic borrowing, tax cuts shape new economic agenda – minister

New British finance minister Kwasi Kwarteng unleashed historic tax cuts and massive increases in borrowing on Friday in an economic agenda that floored financial markets.

This led to plunging the sterling and British government bonds into freefall, while the pound slumped more than 3 percent against the dollar to levels last seen 37 years ago.

Kwarteng scrapped the country’s highest income tax rate and for the first time put the cost of Prime Minister Liz Truss‘s spending plans, who wants to double Britain’s rate of economic growth.

Investors dumped short-dated British government bonds as fast as they could, with the cost of borrowing over five years seeing its biggest one-day rise since 1991.