Sunak to sign UK tax as Sterling remains under pressure

Rishi Sunak, is preparing to decide broad tax raises as the new British prime minister looks to plug a £50bn hole in public finances.

Treasury insiders said, on Monday, that Sunak and his finance minister Jeremy Hunt agreed that while “those with the broadest shoulders should be asked to bear the greatest burden”, everybody’s taxes would go up.

A Treasury official said, after the Sunak-Hunt meeting, “It is going to be rough. The truth is that everybody will need to contribute more in tax if we are to maintain public services.

“After borrowing hundreds of billions of pounds through Covid-19 and implementing massive energy bills support, we won’t be able to fill the fiscal black hole through spending cuts alone”, the official added.

The UK political scene has been a major driver in financial markets of late. However, a new UK administration has brought more stability to the local bond and currency market.

The economic slowdown and rising inflation pose ongoing risks to the pound which is down to the US dollar by some 1.25% on the day so far. GBP/USD fell from a high of 1.1613 to a low of 1.1459.