FT News Briefing Truss’s possible U-turn on tax cuts
Oct 14, 2022
Liz Truss may be gearing up for a significant shift on tax cuts, causing ripples in the financial markets. Meanwhile, the U.S. grapples with an 8.2% rise in consumer prices, stirring conversations about future Federal Reserve actions. Tensions escalate as new U.S. restrictions force semiconductor equipment makers to halt business with Chinese firms, raising concerns about economic warfare. The discussion also touches on the challenges faced by global companies in China and Netflix's innovative ad-supported model boosting its subscriber base.
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Truss’s U-Turn Catastrophic
- Liz Truss's proposed tax cuts caused market turmoil, leading to a plummeting British currency and Bank of England intervention.
- A U-turn on these cuts could stabilize markets but severely damage her political credibility.
Markets Shrug Off Inflation
- US inflation remains high despite Federal Reserve rate hikes, but stock markets showed a surprising uptick.
- This reaction may indicate that high inflation was already priced in, or investors anticipate future policy easing.
US Sanctions on Chinese Chips
- New US sanctions restrict chip equipment suppliers from selling to China, aiming to curb its technological advancement.
- This move has been described as an economic war, potentially impacting the chip industry for decades.