After Reduced Lending Rates, Britons Could Expect Lesser Taxes

November 7, 2008 7:43 p.m. EST

London, England (AHN) - Next to record-breaking cuts in key lending rates, British Prime Minister Gordon Brown is mulling a reduction in taxes to give the ailing U.K. economy a major boost in the arms.

The government had actually started the ball rolling with the removal of the 10-pence tax band. As Brown flies to Brussels on Friday to attend an emergency meeting of the European Union, he hinted fresh tax reduction measures may soon be forthcoming to provide relief to U.K. consumers and businesses.

Brown's spokesman said, quoted by Guardian Unlimited, "With action taken on monetary policy, it is becoming incredibly clear that there is now an emerging consensus across the developed world of the need to use fiscal policy in tandem with monetary policy to support growth. This is a point the prime minister will be making tomorrow and in the days ahead."

The benchmark rate cut and the planned reduction in taxes are bold strategies adopted by the U.K. government to soften the impact of the country falling into a recession and a bid to revive the economy.

The tailspin of the British economy is reflected in the Friday report of British Airways that the national air carrier suffered a 92 percent decline in first half profits, leading to a planned capacity reduction by next summer, which is traditionally its peak flying season.