Kwarteng to bring forward publication of debt-cutting plans – report

by | Oct 4, 2022

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The chancellor Kwasi Kwarteng is to bring forward publication of his debt-cutting plans, it was reported on Tuesday, in his second U-turn in 48 hours.
The government caused widespread turmoil across markets when it announced £45bn of borrowing-funded tax cuts in last month’s mini budget, without detailing spending plans or how it intended to cut debt. Nor did it publish the Office for Budget Responsibility’s economic forecasts.

The pound plummeted in response and gilt yields rose, eventually forcing the Bank of England to step in to buy government debt.

The Treasury also came under intense political pressure for wanting to cut tax for the highest earners during a cost of living crisis, and for refusing to explain how they would be funded until 23 November.

 
 

On Monday, the chancellor yielded to pressure and announced he would abandon plans to cut the top rate of tax, but gave no indication he would bring forward the publication of the medium-term fiscal plan.

However, on Tuesday it was widely reported that the government had now once again bowed to pressure and will publish the plan later this month. The OBR will also bring forward its forecasts, to be published at the same time. The BBC said Conservative MP Mel Stride, chair of the Treasury Committee, had “pressed the chancellor very hard”.

A statement confirming the move is expected later on Tuesday.

 

Markets have reacted positively this week, with the pound reaching $1.13 by 0700 BST, compared to lows of $1.03 it briefly touched immediately after the mini budget.

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