The UK has reversed its decision to cut taxes for high earners, after facing criticism from lawmakers. The move is likely to cause increased volatility in markets, as investors worry about the UK's fundamentals. The Fed is still committed to creating a softer labor market and moving the unemployment rate up.
The video discusses the recent UK U-turn and how it has impacted the markets. It discusses the IMF letter that was the catalyst for the reversal, and how markets seem to be dictating policy responses. There is a larger question about whether markets are dictating fiscal policymakers' responses, and whether they're getting the okay to come out aggressively against this move because of the move in markets and the threat to financial stability.
The UK government has reversed its decision to cut taxes for the highest earners, just 10 days after announcing the plan. Chancellor of the Exchequer Rishi Sunak says the tax cut had become a distraction and that the government has listened to the public outcry. This comes as the OPEC+ group is set to produce a million barrels of oil a day, with Saudi Arabia and Russia in the spotlight.