As part of divisive measures to support the ailing economy, Britain's new Conservative government announced Friday that it will reduce personal income tax, drop a proposed tax increase on businesses, and relax a bar on bankers' bonuses.
Lower taxes were prioritised as the government's top priority by Treasury Secretary Kwasi Kwarteng, who claimed there were "too many impediments for industry."
Kwarteng stated in his "mini budget" that the previous administration's May national insurance tax increase to help pay for health and social services will be reversed.
Prime Minister Liz Truss, who took office less than three weeks ago, has emphasised again and time again that her Conservative party's primary goal is to decrease taxes in order to stimulate the economy.
Many Conservatives disagree with the concept, believing that governments shouldn't amass massive debts that taxpayers will eventually be forced to pay.
Additionally, there are concerns that it would erode trust in the British economy, which has already seen the pound drop to close to 40-year lows versus the US dollar. Before Kwarteng's remark on Friday, the value of the pound plummeted under $1.12.
According to the Bank of England, a recession is two consecutive quarters of economic contraction, and the U.K. may already be in one.
The Institute for Fiscal Studies said that even after the temporary energy bill support measures expire in two years, annual borrowing is expected to reach 100 billion pounds ($113 billion).