Sunday, August 14

New UK finance minister Zahawi says we need to grow the economy


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LONDON — Britain’s new finance minister, Nadhim Zahawi, said on Wednesday the government needed to rebuild and grow the country’s struggling economy, and he would look at all options to do that including the possibility of tax cuts.

“I will look at everything, there is nothing off the table,” he told Sky News, when asked whether he wants to cut taxes.

Britain’s economy is showing signs of a slowdown as inflation heads for double-digits and it is forecast to be weaker than other big industrialized economies next year.

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Zahawi, who moved from the education ministry to the Treasury on Tuesday after the resignation of Rishi Sunak, said 2023 was shaping up to be tough and he would focus on the cost-of-living squeeze facing households.

He also hinted at a rethink of Sunak’s plan to increase taxes on businesses next year.

“Of course I will be looking at where else I can make sure the economy remains competitive and dynamic with our European neighbors and the rest of the world as well. Nothing is off the table,” he told the BBC.

But Zahawi also stressed the need for “fiscal discipline” and said the government would have to be careful about increases in public sector pay which could drive inflation higher.

“The important thing is to get inflation under control, be fiscally responsible,” he told Sky News.

He also said it was important to remember the increase in debt servicing costs.

Zahawi was appointed after Sunak quit the job in protest at Johnson’s “standards” and citing differences over economic policy with the prime minister. (Reporting by William James and Farouq Suleiman; writing by William Schomberg, editing by Elizabeth Piper)



financialpost.com