“Growth, growth, growth” promises Britain’s new Prime Minister Truss at the Tories party conference. However, it remains unclear how it intends to finance its announced fiscal package. The rating agency Fitch fears that the budget deficit will widen significantly and has downgraded the outlook for the UK.
Bad news for the new British Prime Minister Liz Truss, who is already under massive pressure because of her tax and financial policies: The rating agency Fitch has lowered the outlook for Great Britain’s creditworthiness from stable to negative, as the agency announced. The rating agency Standard recently took a similar step
Fitch explicitly cited the government’s financial policy in London as justification: “The large and unfunded financial package that was announced as part of the new government’s growth plan could lead to a significant increase in the deficit in the medium term.” Truss, who has also come under a lot of pressure within the party, defended her fiscal policy course in a speech at the party conference of her conservative Tories on Wednesday in Birmingham. The goal is economic “growth, growth, growth”.
Because of dissatisfaction with her plans, she had previously had to back down from the planned tax cut for top earners. Nevertheless, their course is also suspect on the financial markets because the counter-financing of the plans is unclear and a high level of new debt is feared. Britain is suffering from the worst economic crisis in decades and high inflation. Electricity and gas prices for consumers will probably rise by 80 percent in October, and many companies are on the brink of collapse due to high energy costs. The British pound had fallen to an all-time low against the dollar. Truss’ economic course also caused interest rates to rise significantly.
