Global banks have issued warnings to the British government after it announced a plan for strong tax cuts, which led to worries about debt rising to unsustainable levels and sending the sterling down sharply.
According to Arabiya Net, Citigroup Bank commented that the British government risks a currency crisis that may push the pound sterling to reach the level of parity with the dollar.
As for Deutsche Bank, it confirmed that the Bank of England needs to raise rates in an exceptional meeting to calm the markets, calling for this meeting to be held during the next week.
He noted that the Bank of England's decision to cancel plans to reduce its holdings of government bonds would make economic conditions worse.
The bank had raised interest rates by 50 basis points to 2.25%.
The British government had decided a few days ago to review its tax system to facilitate its procedures, while reducing corporate taxes within certain segments for ten years, in addition to reducing the basic rate of income tax.
British Finance Minister Kwasi Quarting confirmed Friday that the government would not go ahead with a plan to increase corporate tax to 25%, and would instead keep it at 19% in an effort to stimulate economic growth.
Britain's corporate tax rate of 19% was expected to rise to 25% in 2023 under plans announced by former finance minister Rishi Sunak last year.
