4 ms·

> I don't get it. Why can't the government walk back these changes? The lion's share of proposed borrowing is going toward subsidizing energy bills for the pub

by dazc 4y ago

> I don't get it. Why can't the government walk back these changes? The lion's share of proposed borrowing is going toward subsidizing energy bills for the public and for businesses for at least the next 6 months. Walking back the tax aspect might please some but it isn't going to make any real difference, aside from political suicide. I also don't think walking back the energy subsidy is going to win much approval from anyone either. Mortgage interest rates in the US are nudging 7% and the UK is going to follow the same path regardless of any interventions. Almost all other currencies are also falling sharply against the dollar, btw.

jimnotgym 4y ago
They only have to walk back the tax cuts. It is unfunded borrowing that is spooking the markets, not borrowing itself.
- dazc 4y ago
  How were the energy subsidies going to be funded?
  - Symbiote 4y ago
    Other European countries are using windfall taxes on energy companies. https://www.bbc.com/news/business-63089222 https://www.bbc.com/news/business-63089222 (I'm not sure if that's the same tax as e.g. Germany has recently announced, or a separate one.)
- makomk 4y ago
  The vast majority of the unfunded borrowing is paying for the energy bill subsidies, at least up until the next general election (and who knows what will happen after that). The IMF have also specifically warned against those blanket subsidies, not that you'd know this from the BBC's coverage of their statement for some reason, and there are really fundamental economic reasons why they're likely to tank the pound and force the BoE to put interest rates up to do with balance of payments and the global supply of fossil fuels. This is probably less obvious from the media coverage because most of the reporting on the size of those tax cuts seems to quote a hypothetical figure for how much they'd be worth in 2025-6.

by dazc 4y ago

jimnotgym 4y ago

They only have to walk back the tax cuts. It is unfunded borrowing that is spooking the markets, not borrowing itself.

dazc 4y ago
How were the energy subsidies going to be funded?
- Symbiote 4y ago
  Other European countries are using windfall taxes on energy companies. https://www.bbc.com/news/business-63089222 https://www.bbc.com/news/business-63089222 (I'm not sure if that's the same tax as e.g. Germany has recently announced, or a separate one.)
makomk 4y ago
The vast majority of the unfunded borrowing is paying for the energy bill subsidies, at least up until the next general election (and who knows what will happen after that). The IMF have also specifically warned against those blanket subsidies, not that you'd know this from the BBC's coverage of their statement for some reason, and there are really fundamental economic reasons why they're likely to tank the pound and force the BoE to put interest rates up to do with balance of payments and the global supply of fossil fuels. This is probably less obvious from the media coverage because most of the reporting on the size of those tax cuts seems to quote a hypothetical figure for how much they'd be worth in 2025-6.