UK Chancellor cutting short US visit compared to 1976 sterling crisis

London, Oct 14 (IANS) UK Chancellor Kwasi Kwarteng has dramatically cut short his visit to the International Monetary Fund, flying home early from Washington in response to the mounting political crisis over his tax-cutting budget.

Adding to signs that the government is preparing to announce a U-turn over its plan to scrap a rise in corporation tax, the Chancellor left the US capital a day earlier than planned, The Guardian reported.

Treasury sources said the chancellor had two constructive days in Washington but was keen to get back to London to engage with colleagues over his medium-term fiscal plan, due to be announced on October 31.

But his unscheduled departure on a late-night flight from Washington capped a day of drama for the Liz Truss government and prompted comparisons with the sterling crisis suffered by the Labour government in 1976, The Guardian reported.

The then Chancellor Denis Healey turned around at Heathrow rather than fly out to an IMF meeting in Manila after pressure mounted on the pound.

Treasury sources refused to comment on whether Kwarteng’s decision meant a U-turn on corporation tax was imminent, but the chancellor was under pressure to make a decision before the financial markets open for business on October 17.

The pound and government bonds, or gilts, rallied on Thursday at rumours of a change of heart on tax.

But the Bank of England’s support scheme for bonds comes to an end on Friday.

–IANS

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