Perhaps the most significant U-turn in British economic history has led to a stunning non-budget. A planned PS45bn of unfunded tax cuts has seen the axe pulled on a staggering PS32bn over three weeks and three days.
We might have to adopt new terminology. U-turn suggests an operation of the steering wheel. It is as though a lorry with articulation is trying to make a turn with the steering wheel. Show Source Texts
But this is going to be influential, particularly with a decision that is going to be made about targeting the post-April bailouts for energy. So there are legitimate questions about higher taxes and lower aid right now, just as we enter the downturn.
It is remarkable that the PM, defined entirely by the desire to reduce taxes, had to accept higher headline taxation rates than the plans she inherited. Moreover, the U-turn on the introductory tax rate goes beyond simply overturning mini-budget plans; it reverses a future cut in the tax which preceded last week.
The reaction from government loan markets and the foreign exchange markets suggests it is starting to work. As a result, the trust cup is beginning to be filled once more.