UK PM Burnham’s first fiscal policy pledge comes on trial
A statement from United Kingdom (UK) lawmaker Darren Jones, an ally of former prime minister (PM) Keir Starmer, that the funding source of tax cuts on energy bills, as promised by new PM Andy Burnham, was already unfunded, has pushed political stability optimism under the scanner.
"The government will have to set out how it will pay for its new policies at the budget," Jones said on X, formerly known as Twitter.
In his first speech on Monday, UK PM Burnham vowed to remove the value-added tax (VAT) from domestic electricity bills from October 1, cutting around £45 from the average annual bill of around £1,862 that households pay, Reuters reported.
"We're taking immediate action to cut taxes on energy bills, put more money in people's pockets and bring back hope," he said in a statement, having pledged to give people more "breathing space" in their lives.
UK Burnham further added that the cost of tax cuts will be borne by funds allocated for the £1.8 billion ($2.42 billion) digital ID program, which will now be canceled.
Market reaction
A corrective move is seen in the British Pound (GBP) following the tweet from UK lawmaker Jones. At press time, GBP/USD is down to near 1.3440 from its intraday high of 1.3455, but is still marginally higher from Monday's closing price of 1.3430.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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