The UK's newly installed chancellor of the exchequer, Jeremy Hunt, announced his tax and spending plans on Monday, two weeks ahead of schedule, following a tumultuous few weeks for the country's financial markets and Prime Minister Liz Truss' Cabinet.
Hunt scrapped "almost all" of the tax cuts that had been introduced by his predecessor, he said in a televised statement.
He reiterated his warning that he gave over the weekend that difficult decisions will need to be made and that government departments will have to look at making spending cuts.
Hunt hopes the new budget will help calm markets and rebuild some of the confidence the government lost.
What did Hunt change?
The new Treasury chief reversed the plan to cut the income tax rate from 20p to 19p in April next year. He also said the government will return to its plan to raise corporation tax to 25%, up from 19% — the lowest rate out of all G7 member states.
He also said a government plan to cap energy bills for households and businesses will only last until April, limiting another policy introduced by Truss, saying energy prices were too volatile to make a long-term guarantee. He added that he and the prime minister would discuss what would follow the price cap.
"A central responsibility for any government is to do what's necessary for economic stability. This is vital for businesses making long-term investment decisions and for families concerned about their jobs, their mortgages and the cost of living," Hunt said.
The Treasury chief said his changes would raise an extra £32 billion ($36.16 billion; €37 billion) in additional tax revenues for the UK government.
British people 'want stability,' says Truss
Shortly after Hunt's announcement, Prime Minister Truss said the change in policy was needed to address "the serious challenges we face in worsening economic conditions."
"The British people rightly want stability," she wrote on Twitter.
A spokesperson for Truss also told reporters the prime minister acknowledge that the government went "too far, too fast" in its push for growth.
"We recognize that economic stability is important, particularly when we are seeing some of the global headwinds we are right now and that is why we have made these changes," the spokesperson said.
A shaky turnaround in London
Hunt was appointed on Friday after Truss fired close ally Kwasi Kwarteng from the post. Truss only took over the role as prime minister from scandal-ridden predecessor Boris Johnson in early September.
Truss and Kwarteng's initial attempt at arranging a budget, which included tax cuts for the most wealthy and large-scale government borrowing, threw London's financial markets into panic and sent the pound plummeting.
Mounting outrage from the general public as well as from her own Conservative Party peers forced Truss into accepting a humiliating U-turn and walking back some of the most controversial plans.
Truss and Hunt — representing the radical right and moderate wings of the party respectively — spent the weekend hammering out a new budget, but analysts now see Hunt as the driving force behind government policy, leaving Truss a lame-duck prime minister.
