On September 23, Kwarteng unveiled a new growth plan to support the country's economy amid rising costs of living. The plan includes canceling the planned rise in corporate tax, keeping it the lowest in the G20 at 19%. Since the announcement, the yield on the United Kingdom's five-year government bonds has risen to its highest level since 2008, at 4.6%, which means a lower demand for British debt securities, triggering a barrage of criticism against Prime Minister Liz Truss' government.
"I can be frank. I know the plan put forward only 10 days ago has caused a little turbulence. I get it. We are listening and have listened, and now I want to focus on delivering the major parts of our growth package," Kwarteng said at the Conservative party Conference.
Earlier in the day, the UK government decided to abandon the measure to cut tax on incomes over 150,000 pounds ($168,000) a year from 45% to 40% due to popular discontent, as well as turmoil on financial markets. Following the announcement of the plan, the British pound fell to an all-time low of $1.0384 against the US dollar, putting further pressure on Truss.
Kwarteng added that economic growth is what the UK now needs more than ever, amid the worsening energy crisis.
"What Britain needs more than ever is economic growth and the government wholly committed to economic growth. That is why, we will forge a new economic deal for Britain backed by an iron-clad commitment to fiscal discipline," the official emphasized.
According to Kwarteng, the government will focus on major parts of the growth package, including the energy price guarantee that will fix energy bills for households at 2,500 pounds per year.