Yahoo Movies Another U-Turn As Kwarteng To Bring Forward Debt-Cutting Plan To Calm Markets
Chancellor of the Exchequer, Kwasi Kwarteng delivers his keynote speech to party members at the annual Conservative Party conference in Birmingham. (Photo: Stefan Rousseau via PA Wire/PA Images)
Kwasi Kwartengis to bring forward publication of his plan to bring down public debt to later this month in the chancellor’s second u-turn in less than 24 hours.
Kwarteng had previously insisted he would wait until November 23 to publish the so-called medium-term fiscal plan, alongside official forecasts from the Office for Budget Responsibility.
But after earlier dropping his plan to scrap the top 45p rate of income tax, Kwarteng has made another reversal in an attempt to calm the markets after the volatility caused by his mini-budget.
The change, first reported by the Financial Times, is to take place before the Bank of England next decides on interest rates in early November.
Kwarteng, in his speech to the Tory party conference, had said he would publish details “shortly” on how he planned to bring down public debt as a percentage of GDP over the medium term.
The embattled chancellor has sought to shrug off the chaos that triggered his astonishing U-turn on income tax cuts for the highest earners as a “little turbulence”.
His mini-budget on September 23 prompted £65 billion of Bank of England action to stave off fresh financial turmoil after the pound plummeted.
The fear of sharp rises in interest rates to deal with the fall-out has led to thousands of mortgages to be withdrawn, and is likely to mean a sharp rise in monthly payments for any household remortgaging their home shortly.
And yet, after his speech, Kwarteng went on to discuss what he called the “hullabaloo” and the “market reactions and the excitement” that followed his mini-budget, while giving a brief speech at a drinks reception for the PolicyExchange think tank.
Opposition MPs accused the chancellor of “laughing” at the chaos, with Labour warning of a “huge economic body blow to working people that will mean higher prices and soaring mortgages”.
The FT said Kwarteng was expected to accelerate publication to later this month, saying his statement would set out a five-year plan to put debt on a downward path, including a tight squeeze on public spending.
The move is designed to reassure markets by spelling out how billions of pounds in tax cuts will be paid for, which was thought to be a driving force behind the run on the pound and bond markets.
This article originally appeared on HuffPost UK and has been updated.
