LONDON (AP) – Britain’s new Treasury chief will release details of his tax and spending plans on Monday, two weeks ahead of schedule, in an attempt to calm markets rattled by the government’s economic policies.
Chancellor of the Exchequer Jeremy Hunt is expected to scrap a number of measures announced by Prime Minister Liz Truss’s government on September 23.
Truss called Hunt on Friday after she fired his predecessor, Kwasi Kwarteng. Plans by Truss and Kwarteng for tax cuts of 45 billion pounds ($50 billion) – including income tax cuts for the highest earners – without an accompanying estimate of how the government will pay for them, sent the pound falling to a record low in against the US dollar and the cost of government borrowing is rising. The Bank of England was forced to engage in government bond purchases to prevent the financial crisis from spreading to the wider economy.
The government has since scrapped parts of its tax-cutting plan and announced it would deliver a medium-term fiscal statement on October 31. But the market remains jittery, and Hunt decided he had to make a statement to calm the waters even sooner.
The Treasury said he would make a public statement, followed by a statement in the House of Commons, on Monday afternoon. Hunt spent the weekend in crisis talks with Truss and also met Bank of England Governor Andrew Bailey and the head of the government’s debt management office.
The financial fiasco has turned Truss into a no-nonsense prime minister, with Conservative MPs agonizing over whether to try to oust her. She took office just six weeks ago after winning the party’s election to replace Prime Minister Boris Johnson. He was ousted in July after a series of ethics scandals engulfed his administration.