(MENAFN- Trend News Agency)
British Prime Minister Liz Truss on Thursday defended her
government's fiscal statement announced last week, calling it 'the
right plan,' amid wide criticism and huge financial market
volatility, reports citing .
'We had to take decisive action,' and the measures were
necessary to get the economy moving and deal with inflation,' said
Truss in her first media comments after the United Kingdom (UK)
government on last Friday unveiled the largest tax cut package
since 1972, which rattled markets.
Avoiding a projected economic slowdown meant it was important
the government took action quickly, the prime minister said as she
appeared across BBC local radio stations.
Over the past days, the fiscal plans have thrown markets into
turmoil as the British pound collapsed and the government borrowing
costs rose sharply. Investors are concerned that the policy will
ramp up public borrowing, bring serious fiscal uncertainty and push
up the already high inflation.
The International Monetary Fund (IMF) has openly criticized the
UK government over its tax-cutting plans.
Given elevated inflation pressures in many countries, including
the UK, 'we do not recommend large and untargeted fiscal packages
at this juncture, as it is important that fiscal policy does not
work at cross purposes to monetary policy,' said the IMF.
Truss responded on Thursday that 'There are many people with
many different opinions but what I think nobody is arguing with is
we had to take action with what is a very difficult economic
situation,' she said.
'It is important the UK is on the front foot, we are pulling all
the levers we can to drive economic growth,' she added.
The prime minister said the government is working closely with
the Bank of England (BoE) on its fiscal plans, and the central bank
does a 'very good job' of looking after pensions.
The BoE on Wednesday announced temporary purchases of long-dated
UK government bonds 'on whatever scale is necessary' in an
emergency move to restore orderly market conditions.
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