The UK government's disastrous rollout of its "mini-budget" is a cautionary tale for policymakers around the world as they pursue measures to help households deal with rising energy prices and inflation. When an economy is already operating near capacity, one group's benefit is another group's cost.
CAMBRIDGE – Following an immediate and brutal reaction from financial markets, UK Prime Minister Liz Truss has, fortunately, abandoned her government’s proposal to lower the tax rate paid by the country’s highest earners. Nonetheless, the experience following her ill-advised “mini-budget” should be a warning to policymakers around the world as they pursue measures intended to help households hurt by rising energy prices and inflation more broadly.
CAMBRIDGE – Following an immediate and brutal reaction from financial markets, UK Prime Minister Liz Truss has, fortunately, abandoned her government’s proposal to lower the tax rate paid by the country’s highest earners. Nonetheless, the experience following her ill-advised “mini-budget” should be a warning to policymakers around the world as they pursue measures intended to help households hurt by rising energy prices and inflation more broadly.