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Liz Truss Tax Cuts May Push Rates Closer to UK’s Pain Threshold

July 26, 2022, 11:07 AM

If you listen to Liz Truss’s allies on economic policy, Britain may be about to end the era of cheap money, delivering significant pain for millions of families.

The UK foreign secretary, who is competing with Rishi Sunak to replace Boris Johnson as prime minister, plans immediate tax cuts in a move her own supporters acknowledge would force interest rates higher than investors anticipate.

A key adviser to Truss, the economist Patrick Minford, last week raised the prospect that interest rates could rise as high as 7%, a suggestion he has since reined in.

Many mainstream economists say the ...