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Britain’s new Chancellor of the Exchequer has promised to review the government’s plan to raise corporation tax after a dramatic night of resignations and a premiership on the brink of collapse.
In his first round of media interviews since taking office at the Treasury, Nadhim Zahawi said he could cancel a corporate tax hike planned for next April as he tries to restore confidence in the government shaken by the resignations of Chancellor Rishi Sunak and Health Secretary Sajid. Javid within minutes of each other.
April’s tax hike aims to raise £17billion a year to help fix public finances after the UK government borrowed hundreds of billions of pounds to navigate the country through the Covid-19 pandemic .
The increase was proposed by Sunak but opposed by many cabinet members and Conservative Party MPs who believed the government should cut taxes to help voters tackle the cost of living crisis and spur growth . Sunak, however, feared the tax cut would fuel inflation, leading to disagreements with Prime Minister Boris Johnson.
In his letter of resignation, the former chancellor said a low-tax, high-growth economy with world-class public services “can only be responsibly delivered if we are prepared to work hard, to make sacrifices and to make difficult decisions”.
He went on to say that he firmly believes “the public is ready to hear” the truth about the need to raise taxes and cut spending to pay government loans during the pandemic.
Jacob Rees-Mogg, Brexit Opportunities Minister and a close Johnson ally, insisted the cabinet changes were positive and Zahawi’s appointment would unify the government.
The resignations of Sunak and Javid were followed by those of a string of junior ministers and aides, and increased pressure on the PM who will face opposition Labor leader Sir Keir Starmer in the House of the Commons today for the weekly session of Prime Minister’s Questions. , when he will again have to answer uncomfortable questions about his driving.
Thanks for reading FirstFT Americas and here’s the rest of today’s news — Gordon
Five other stories in the news
1. Exclusive: Meta is moving forward with digital collectibles Facebook’s parent company is moving forward with plans to roll out access to non-fungible tokens to its 3 billion users despite falling crypto asset prices, the company’s new fintech head says at the Financial Times. Stephane Kasriel said the company will “in no way” adjust its plans for so-called non-fungible tokens which it hopes will appeal to young people.
2. Amazon buys stake in US food delivery service Grubhub Amazon has agreed to take a 2% stake in Grubhub, the US venture of struggling online food delivery group Just Eat Takeaway. As part of the deal, Amazon Prime users in the United States will receive a one-year subscription to Just Eat’s Grubhub food delivery service.
3. Property prices set to fall as investors face a ‘new paradigm’ Real estate transactions are set to tumble and values fall as investors adjust to a “new paradigm” of rising rates and a global economy in turmoil, Brookfield’s European real estate chief warned. Brad Hyler, who manages the Canadian private equity fund’s $52 billion property portfolio in the UK and on the continent, said property investors had been taken aback by the rapidly deteriorating economic outlook.
4. Suspect in Chicago Suburban Parade Massacre Charged with Murder Illinois prosecutors yesterday announced murder charges against Robert E Crimo III, the 21-year-old man charged with the mass shooting during a July 4 parade in the Chicago suburb of Highland Park that took seven dead and more than 30 injured. Crimo will appear in court this morning, where prosecutors will ask that he be held without bail.
5. Norway ends oil and gas strike Oslo stepped in to end industrial action by oil and gas workers who threatened to cut production as Europe rushed for supplies to offset Russian production cuts. The strike had cut gas supplies to the UK and much of mainland Europe and caused gas prices to soar to their highest level in four months.
The day ahead
The president refocuses attention on the economy Following his trip to Europe for the G7 and NATO summits and ahead of a planned visit to the Middle East next week, the president is heading to Cleveland, Ohio today to refocus on the economy and rising prices. The White House has been looking for ways to support households, including a proposed gas tax exemption, a possible decision to cancel some student loans and the removal of tariffs on some Chinese imports.
Fed Minutes The U.S. Federal Open Market Committee releases minutes from its June meeting, which could give further clues to the extent to which the central bank is willing to tighten monetary policy.
Economic data The Institute for Supply Management publishes its non-manufacturing index and it is expected to have fallen to 54.3 in June from 55.9 in May, according to economists polled by Refinitiv. The US Bureau of Labor Statistics is also expected to release data showing job openings fell slightly to 11 million in May from 11.4 million the previous month.
Women’s Euro 2022 The tournament, which kicks off in England and runs until the end of the month, is expected to set records for broadcast viewership for women’s football as well as attendance.
What else we read and listen to
Will the crypto crash derail the next web revolution? This year’s market meltdown — part of a broader retreat from risky financial assets in the face of rising interest rates — could seriously weaken the incentives that have made crypto one of the world’s hottest coins. hot in the tech world. Web3, a new generation of user-controlled online services that its proponents believe will unseat today’s Internet giants, is now under threat.
EPA Supreme Court ruling puts regulators in handcuffs At first glance, the principle behind the US Supreme Court’s ruling last week preventing the Environmental Protection Agency from regulating carbon emissions seems as American as apple pie. But the decision is likely to become a club for pushing back on ordinary rulemaking at federal agencies, including the Securities and Exchange Commission and Federal Trade Commission, argues Brooke Masters.
Qatar comes first The Gulf state has built an outsized role for itself in global commodity markets since it began exporting liquefied natural gas more than two decades ago. Today, following Russia’s invasion of Ukraine and several agreements to develop a gas field, Qatar’s influence is set to grow.
Congolese president warns of risk of war with Rwanda Felix Tshisekedi told the Financial Times that conflict could break out unless his country’s neighbor stops backing rebel groups fighting in the east. The president’s comments followed a strong offensive in eastern Congo by the M23 militia, which he said was backed by Rwanda.
Knocking on the door of a porn empire Financial pressure has caused porn giant MindGeek to drastically change its practices. But one of his biggest rivals has changed almost nothing. In the latest episode of Hot Money, Patricia Nilsson visits the company’s headquarters in Prague to find out why.
Work and career
Some of the most successful CEOs, from Apple’s Steve Jobs to Superdry’s Julian Dunkerton, share a tendency to leave the company they started – and come back. Meet the founders with the boomerang factor.
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