• “Nothing on the table” for the economy – Zahawi
  • I’ll see where more can be done on taxes
  • Zahawi also stresses the need for fiscal responsibility
  • Labor says political chaos is adding to economic problems

LONDON, July 6 (Reuters) – Britain’s new finance minister Nadhim Zahawi pledged on Wednesday to rebuild and develop the struggling economy and said he would consider all policy options, including possible tax cuts.

Zahawi, who took over the Treasury on Tuesday after Rishi Sunak resigned in protest against embattled Prime Minister Boris Johnson, said “nothing is on the table”.

But the former education minister also wondered if he would even stand a chance of pulling the economy out of its downturn, given Johnson’s weakened grip on power.

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Other government ministers to resign included Health Minister Sajid Javid and Deputy Finance Minister John Glen, who was responsible for the City of London. Read more

Britain’s economy has lost momentum as inflation heads into double digits and growth is expected to be weaker than other major industrialized economies next year.

Bank of England chief economist Huw Pill said he expected no economic growth over the next year as households faced the highest inflation in 40 years. Read more

Britain is also struggling to adjust to life after Brexit.

Economists said Zahawi’s appointment and the possibility of a new prime minister raised the prospect of faster growth, and possibly further interest rate hikes by the BoE in response.

“The potential medium-term gains could make the short-term stasis caused by another Conservative leader contest worth it,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

He said a more pragmatic approach to relations with the European Union would increase exports and business investment.

Britain’s new Chancellor of the Exchequer Nadhim Zahawi arrives for television interviews, in London, Britain July 6, 2022. REUTERS/Phil Noble

FUTURE TAX CUTS?

Zahawi, widely credited within the Conservative Party with successfully overseeing the rollout of the COVID-19 vaccine in Britain, said 2023 was shaping up to be “really tough”.

Zahawi hinted at moves to ease personal taxes and revamp Sunak’s plan to raise corporate taxes next year.

“Nothing is on the table. I’m going to look at everything. When boards of directors invest, companies invest, they invest for the long term and they compare corporate tax rates,” he told Times Radio.

Many conservative lawmakers want tax cuts and Sunak was looking for ways to boost lackluster business investment.

The government was likely to have some leeway for tax cuts according to official forecasts made in March. But since then, Britain’s growth and inflation outlook has deteriorated.

Zahawi said his priority was tackling inflation – which could be made worse by tax cuts – and he also stressed the need to fix public finances after the £400bn (£479bn) response. dollars) from Sunak to the coronavirus pandemic.

“We have just come out of the equivalent of a world war. We need to rebuild the economy and return to growth,” he said.

Zahawi was appointed after Sunak quit his post in protest at Johnson’s “standards” and citing differences over economic policy with the prime minister.

The opposition Labor Party said the political chaos was compounding the economy’s problems.

“The pound is weak because the government is weak. And a weak pound means energy costs, the cost of petrol and diesel are going up more and more,” said future finance minister Rachel Reeves. of Labour. ($1 = 0.8356 pounds)

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Additional reporting by William James, Farouq Suleiman and David Milliken; written by William Schomberg and David Milliken, editing by Elizabeth Piper, Angus MacSwan and Bernadette Baum

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