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Chancellor to deliver some fiscal measures to support the market today

  • As noted in earlier bullets, the Chancellor will make a statement today "bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability."
  • Last week saw the reversal of the plan to cut the rate of income tax for those earning over GBP150,000 on Monday morning and by Friday PM Liz Truss had sacked Chancellor Kwarteng and replaced him with Jeremy Hunt. Hunt did not support Truss in the leadership race - he originally stood in the race but was knocked out in the first round of voting by MPs and then supported Rishi Sunak. Hunt is best known as a former Health Secretary for almost six years (under Cameron and May) before becoming May’s Foreign Secretary. He did not serve in the cabinet under Johnson’s premiership and has been a backbench MP over the past three years (but has been Chair of the Health Select Committee since January 2020).
  • As part of the press conference held by Truss on Friday afternoon, she confirmed that her plans to maintain corporation tax at 19% would be reversed (and instead it would rise to 25% as under Sunak’s plans as Chancellor).
  • The weekend press has also seen heightened speculation that the plan to bring forward the 1ppt cut in the basic rate of income tax from April 2024 to April 2023 will also be scrapped. This would leave the removal of the 1.25ppt NIC rise the only significant measure (in cost terms) to remain intact from the "Growth Plan".
  • Hunt has also said there would be difficult decisions on spending to be made - it will be interesting how much detail (if any) of any spending cuts will be outlined today.

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