The FT’s quick guide to the UK mini-Budget

UK chancellor Kwasi Kwarteng declared a “new era” of growth with the announcement of his mini-Budget on Friday. The set of tax cuts, worth £45bn, were the biggest since 1972.

However, the plan will also push up public borrowing at a time when interest rates are rising and the economic outlook is deteriorating. After his announcement, sterling fell to its lowest level since 1985 and gilt yields jumped, reflecting investor nervousness around the measures.

Tax cuts

  • The set of tax cuts will cost the economy £45bn by 2026-27, the equivalent of 1.5 per cent of gross domestic product

Bar chart of Tax cuts (% of GDP) showing Today's statement represents the  biggest tax cut since 1972

Key tax reductions


In tax cuts by 2026-27


Basic rate of income tax, cut from 20% from April 2023


Additional rate of income tax for the highest earners cut from 45%


Corporation tax to stay at its current level, the lowest in the G20

£250, 000

Property value at which homebuyers start paying stamp duty, up from £125,000


Proposed rise in national insurance will be reversed from November 6

Bankers’ bonuses


Line chart of weekly earnings at constant 2015 prices, showing real wages are falling sharply

Investment zones

  • Tax incentives and liberalisation of planning regulations for about 40 so-called “investment zones

  • Government announces discussions are already taking place with Tees Valley, West Midlands, Norfolk and the West of England


Relief from business rates on newly occupied business premises


First-year allowance on qualifying expenditure for companies’ purchasing plant and machinery assets


Stamp duty tax relief for land and buildings bought for use or development for commercial purposes

Markets reaction

  • Sterling slipped 3 per cent to $1.09 on Friday morning after the announcement — its lowest level since 1985

  • The pound also dropped as much as 1.7 per cent against the euro to €1.123

  • The yield on UK government bonds rose sharply together with expectations of interest rate rises

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