UK Markets Plunge as Chancellor Drops Tax Hike

UK Financial Markets in Turmoil: Chancellors U-turn on Income Tax Hike Sparks Investor ConcernsThe UKs financial markets experienced a significant downturn following reports that Chancellor Rachel Reeves abandoned plans to raise income tax in the upcoming Budget. The FTSE One Hundred fell by 1.1%, marking its worst day since April, while government borrowing costs surged, with the yield on ten-year UK gilts climbing by 13.6 basis points. The pound also declined against major currencies. The decision to reverse the income tax hike, despite the Office for Budget Responsibilitys report of a smaller-than-expected financial gap, raised concerns among investors and economists about the governments ability to manage public finances. Analysts warned that a smaller and messier approach to fiscal tightening could harm the governments credibility and lead to further market instability.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.