British finance minister sticks to tax-hiking plans, pledges post-Brexit reforms

LONDON — British Finance Minister Jeremy Hunt on Friday signaled he is pushing ahead with tax hikes, while stressing the need to develop Brexit into a "catalyst" for U.K. growth.

"The best tax cut right now is a cut in inflation," Hunt said in a speech addressed to tech giants, including Amazon, Google and Meta, as he looks to dispel economic "gloom" in the U.K.

Optimism in the U.K. economy has been in "short supply" in recent months, Hunt said.

Hunt told companies that they were important for the U.K. outlook, but added that "Britain is vital for your future too" and asked for their help to make the country "the world's next Silicon Valley."

The Finance Minister stressed the importance of making the U.K. a place where companies want to do business.

He underscored that Britain needs to have "nothing less than the most competitive tax regime of any major country," despite restoring the planned rise in corporation tax from 19% to 25% after it was scrapped by former Finance Minister Kwasi Kwarteng.

The British pound was down 0.25% against the dollar, hitting $1.237 following the speech. It recovered some of its losses from when Hunt began speaking, but pulled away from the six-week high struck on Thursday. 

Hunt's speech comes as the U.K. inflation rate most recently reached 10.5% in December, well above the Bank of England's target of 2%. The bank next meets to decide monetary policy on Feb. 2.