UK Treasury chief to set out tax-slashing emergency budget

LONDON (AP) — The U.K. government is expected to publish an emergency budget statement Friday outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

Treasury chief Kwasi Kwarteng’s “mini-budget,” to be presented to lawmakers, is expected to scrap a planned increase in corporation tax.

Prime Minister Liz Truss, who became the U.K.’s leader less than three weeks ago, has repeatedly stressed that her Conservative government’s core mission is lowering taxes to drive economic growth. She declared this week that she is ready to make “unpopular decisions” such as boosting bankers’ bonuses to attract jobs and investment.

The Institute for Fiscal Studies predicts that even though Friday’s statement isn’t a full budget, it looked set to be the U.K.’s “biggest tax-cutting fiscal event” for more than 30 years.

“Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy,” Kwarteng said Thursday. “Cutting tax is crucial to this.”

Before his statement Friday, the Treasury chief confirmed that he was reversing a hike in workers’ national insurance contributions that was introduced by the previous administration. Kwarteng’s predecessor, Rishi Sunak, imposed the increase to pay for social care and a backlog in the public heath service.

Soaring inflation and a cost-of-living crisis driven by steeply climbing energy costs are the biggest immediate challenges facing Truss’s government. Inflation stands at 9.9%, near the highest Britain has seen since the 1980s, and is predicted to peak at 11% in October.

In the past two weeks, the government has announced that the government will cap gas and electricity bills for households and businesses, amid...