New British Chancellor Kwasi Kwarteng fired the first shot on Friday at the Prime Minister Liz Trussfor economic growth, and the pound quickly lost up to 2% of its value against the dollar. One ignores market signals at one’s peril, but in this case it is worth analyzing who is signaling what about whom. It is a pro-growth agenda that is very different from the tax-and-spend Keynesianism that has dominated Western economic policies for nearly two decades.
Ms Truss campaigned for her post this summer on a promise to shake up Britain’s economy with a supply-side revolution. And she shows that she means it. Mr. Kwarteng’s announcement, timidly presented as a “mini-budget”, is the largest package of tax cuts in 50 years.