Mostly clear and chilly with diminishing winds. .

Mostly clear and chilly with diminishing winds.

Britain's Chancellor of the Exchequer Kwasi Kwarteng arrives in Downing Street in London, Wednesday, Sept. 7, 2022 for the first cabinet meeting since Liz Truss was installed as British Prime Minister a day earlier.

Britain's Chancellor Kwasi Kwarteng leaves 11 Downing Street in London, Friday, Sept. 23, 2022. The Chancellor will deliver a mini budget in parliament.

Britain's Chancellor Kwasi Kwarteng leaves 11 Downing Street in London, Friday, Sept. 23, 2022. The Chancellor will deliver a mini budget in parliament.

Britain's Chancellor Kwasi Kwarteng leaves 11 Downing Street in London, Friday, Sept. 23, 2022. The Chancellor will deliver a mini budget in parliament.

FILE - Britain's Chancellor of the Exchequer Kwasi Kwarteng arrives in Downing Street in London, on Sept. 7, 2022 for the first cabinet meeting since Liz Truss was installed as British Prime Minister a day earlier. Britain’s Conservative government is expected to publish an emergency budget statement Friday, Sept. 23, 2022 outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

Pedestrians pass a currency exchange sign outside a shop in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

FILE - Shoppers buy food in a supermarket in London, on Aug. 17, 2022. Britain’s Conservative government is expected to publish an emergency budget statement Friday, Sept. 23, 2022 outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

A pedestrian passes a shop advertising a sale in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

FILE - British Prime Minister Liz Truss speaks to the media on the occasion of her visit at the Empire State building in New York, on Sept. 20, 2022. Britain’s Conservative government is expected to publish an emergency budget statement Friday, Sept. 23, 2022 outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

Shoppers at a fruit and vegetable stall in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

Pedestrians pass a closing down shop in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

A pedestrian passes an estate agent window in London, Friday, Sept. 23, 2022. Britain's new government announced on Friday a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

Britain's Chancellor of the Exchequer Kwasi Kwarteng arrives in Downing Street in London, Wednesday, Sept. 7, 2022 for the first cabinet meeting since Liz Truss was installed as British Prime Minister a day earlier.

Britain's Chancellor Kwasi Kwarteng leaves 11 Downing Street in London, Friday, Sept. 23, 2022. The Chancellor will deliver a mini budget in parliament.

Britain's Chancellor Kwasi Kwarteng leaves 11 Downing Street in London, Friday, Sept. 23, 2022. The Chancellor will deliver a mini budget in parliament.

Britain's Chancellor Kwasi Kwarteng leaves 11 Downing Street in London, Friday, Sept. 23, 2022. The Chancellor will deliver a mini budget in parliament.

FILE - Britain's Chancellor of the Exchequer Kwasi Kwarteng arrives in Downing Street in London, on Sept. 7, 2022 for the first cabinet meeting since Liz Truss was installed as British Prime Minister a day earlier. Britain’s Conservative government is expected to publish an emergency budget statement Friday, Sept. 23, 2022 outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

Pedestrians pass a currency exchange sign outside a shop in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

FILE - Shoppers buy food in a supermarket in London, on Aug. 17, 2022. Britain’s Conservative government is expected to publish an emergency budget statement Friday, Sept. 23, 2022 outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

A pedestrian passes a shop advertising a sale in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

FILE - British Prime Minister Liz Truss speaks to the media on the occasion of her visit at the Empire State building in New York, on Sept. 20, 2022. Britain’s Conservative government is expected to publish an emergency budget statement Friday, Sept. 23, 2022 outlining how it plans to slash taxes, tame soaring inflation and boost economic growth as a recession looms on the horizon.

Shoppers at a fruit and vegetable stall in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

Pedestrians pass a closing down shop in London, Friday, Sept. 23, 2022. Britain's new government on Friday announced a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

A pedestrian passes an estate agent window in London, Friday, Sept. 23, 2022. Britain's new government announced on Friday a sweeping plan of tax cuts it said would be funded by borrowing and revenues generated by anticipated growth, as part of contentious moves to combat the cost-of-living crisis and bolster a faltering economy.

LONDON (AP) — The United Kingdom's new government outlined plans Friday to cut taxes and boost spending in an effort to bolster the faltering economy, but the high-risk moves sparked concerns that increased public borrowing will worsen a cost-of-living crisis and sent the British pound on its biggest one-day drop in 2 1/2 years.

Treasury chief Kwasi Kwarteng announced sweeping tax cuts that he said would boost economic growth and generate increased revenue without introducing corresponding spending reductions. He also said previously announced plans to cap soaring energy bills for homes and businesses would be financed through borrowing.

Kwarteng offered few details on the costs of the program or its impact on the government’s own targets for reducing deficits and borrowing, but one independent analysis expected it to cost taxpayers 190 billion pounds ($207 billion) this fiscal year.

It triggered the pound’s biggest drop against the U.S. dollar since March 18, 2020, when then-Prime Minister Boris Johnson announced the first nationwide lockdown to control the spread of COVID-19. The British currency fell more than 3% to as low as $1.0899 in afternoon trading in London, from 1.1255 on Thursday.

Investors are concerned that government lacks a “coherent policy" at a time when the economy is facing “immense inflationary pressures," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“I think Kwasi Kwarteng really set off fireworks with his budget,″ Streeter told The Associated Press. “It was much bigger and bolder than expected. But the real concern on financial markets is that these widespread tax cuts are unfunded, they’re going to add to the government’s debt burden.″

Prime Minister Liz Truss, who took office less than three weeks ago, is racing to combat inflation at a nearly 40-year high of 9.9% and head off a prolonged recession. Facing a general election in two years, she needs to deliver results quickly.

The government's program offers immediate help for homes and businesses struggling with soaring energy costs while betting that lower taxes and reduced red tape will spur economic growth and increase tax revenue in coming years.

“We need a new approach for a new era, focused on growth,” Kwarteng told lawmakers in the House of Commons.

But opponents accuse the government of dodging scrutiny by rolling out a major shift in economic policy without the normal analysis from the independent Office for Budget Responsibility. Kwarteng said the office would publish a full economic and fiscal forecast before the end of the year.

The opposition Labour Party attacked the plan for favoring the interests of business over working people and failing to provide any figures on its impact on government fiscal targets.

“It is a budget without figures, a menu without prices,’’ said Rachel Reeves, Labour’s spokeswoman on Treasury issues. “What has the chancellor got to hide?”

The British economy has foundered for the past three months as Truss’ center-right Conservative Party staged an internal contest to replace Johnson, who stepped down after a series of scandals.

That left the country with a caretaker government unable to introduce new policies to shield consumers from soaring energy prices, which are fueling inflation and curbing economic growth. The Bank of England on Thursday forecast that gross domestic product would shrink for a second consecutive quarter in the three months ending Sept. 30, an informal definition of recession.

Since taking office, Truss announced plans to cap energy prices for both consumers and business that are expected to cost taxpayers more than 150 billion pounds ($166 billion).

Inspired by Margaret Thatcher’s small-state, free-market economics, she is also pressing ahead with her campaign promise to boost economic growth by cutting taxes and reducing red tape. This will benefit everyone, she argues, by spurring investment, creating jobs and generating more tax revenue.

The so-called mini-budget unveiled Friday reverses many of the initiatives announced by Johnson and his Conservative predecessors, who have led Britain for the past 12 years.

For example, Kwarteng announced that he was canceling an increase in national insurance taxes that Johnson introduced in May to boost spending on health and social care. Kwarteng said the government would maintain the expected level of funding for the National Health Service — but he didn’t say how.

Kwarteng also said the government would cut the basic rate of income tax to 19% next year from 20%. The top rate will drop to 40% from 45%. In addition, he canceled a planned 6 percentage point increase in the corporate tax rate, leaving it at 19%.

“This was the biggest tax-cutting event since 1972, it is not very mini,” said Paul Johnson, director of the Institute for Fiscal Studies, an independent think tank that scrutinizes government spending. “It is half a century since we have seen tax cuts announced on this scale.”

Truss declared this week that she was ready to make “unpopular decisions” such as removing a cap on bankers’ bonuses to attract jobs and investment.

On Friday, Kwarteng announced new “investment zones” across England where the government will offer tax cuts for businesses and help create jobs. He also said the government would accelerate dozens of major new infrastructure projects, including in transportation, telecommunications and energy.

Truss’ overall program runs counter to the views of many Conservatives, who believe the government shouldn’t rack up huge debts that taxpayers will eventually have to pay.

Reeves, of the Labour Party, criticized the government for expecting taxpayers to foot the bill, rather than increasing a tax on the windfall profits of energy producers benefiting from the jump in oil and natural gas prices triggered by Russia's war in Ukraine.

While Kwarteng denied that the government was gambling on a “dash for growth,” many economists said it was taking a huge risk by allowing borrowing to balloon while the economy is weak and inflation is high.

The IFS has estimated that Truss’ policies will push borrowing to 190 billion pounds this fiscal year, compared with the 99 billion pounds that the Office for Budget Responsibility forecast in March. While borrowing is expected to decline over the next four years, it will remain above the previous forecast throughout the period, the IFS said.

As a result, government debt will rise to about 94% of GDP by the 2026-27 fiscal year, compared with the March OBR forecast of 81%, the IFS said.

To offset that increase, the government’s policies would have to achieve an additional 0.7% increase in economic output every year for the next five years, according to the IFS.

“If the government were to achieve this feat and get that extra growth, it would be either a stroke of extraordinarily good luck or a huge policy success,” Isabel Stockton, an IFS economist, said Thursday.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

If you know of local business openings or closings, please notify us here.

- All-you-can-eat Korean barbecue is on its way, with 88 K-Pot opening perhaps in December near the Wine & Spirits store in the Bethlehem Square shopping center. 

- Air Products' joint venture in Saudi Arabia has acquired an industrial-gas business for an undisclosed price. The Abdullah Hashim Industrial Gases & Equipment venture acquired Khafrah Industrial Gases from Paris-based Air Liquide S.A.

- Anatolian Kitchen is still closed for renovations, according to a sign at the Taylor Court, Bethlehem, business. 

- After 36 years, the owners of Cavaluzzo's Pasta, Steaks & Subs in Emmaus are retiring, and the restaurant will close.

- The high-tech conglomerate formerly known as II-VI (pronounced “two-six”) has taken on the name of a company it acquired, Coherent Corp. 

- Palmer Township's board of supervisors approved a conditional-use application for four industrial buildings know as "First Park 33" on Tatamy Road, between Newlins Mill and Corriere roads.

- The Florida-based chain Fyzical Therapy & Balance Centers plans to open three physical-therapy clinics within two years in the Lehigh Valley.

- Radish Republic, a specialty grocery store on North Seventh Street in Allentown, is closing after three years.

- The Palmer Township Zoning Hearing Board made the decision to keep a cease-and-desist order against The Reserve at Palmer Pointe apartments, which township officials say were built contrary to designs submitted six years ago.

- The Allentown-Based payment-processing company Shift4Payments Inc. introduced SkyTab POS, a point-of-sale system for restaurants. 

- The Bethlehem Planning Commission approved three separate "mixed-use" buildings for South Bethlehem, on East Fourth Street, South New Street and West Fourth Street.

- Transform Rehabilitation's physical-therapy clinics in Allentown, New Tripoli and Whitehall are now part of Upstream, which owns or manages more than 1,200 locations in the U.S.

- The Lehigh Valley's newest Wawa opened on the east side of Nazareth Pike/Route 191, just south of the Borough of Nazareth. 

- DoubleTree Hotel has expanded its catering to private jets that take off from Reading Regional Airport.

- The not-for-profit Kutztown Community Partnership has discussed buying the shuttered Strand Theatre to continue its tradition, but KCP would need grants and donations to keep it going.

- A man police say was drunk drove into Budd Lake Bagel & Deli II in Hackettstown, New Jersey, on Sunday night, causing the shop to close indefinitely.

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