Chancellor Kwasi Kwarteng has bowed to pressure to bring forward the publication of his financial strategy and independent economic forecasts – to Halloween. Completing another U-turn, Mr Kwarteng agreed to set out his medium-term fiscal plan alongside Office for Budget Responsibility (OBR) predictions on October 31.
The Chancellor had been resisting setting out the details ahead of November 23 after he set out his multibillion-pound package of tax cuts to be paid for by borrowing. Commons Treasury Committee chair Mel Stride welcomed the move, saying the documents may result in a smaller rise in interest rates which is “critical to millions” of mortgage holders.
But the senior Tory MP warned this would only be the case if the plan “lands well with the markets” ahead of a Bank of England meeting on November 3. Having been spooked by the scale of borrowing to fund £45 billion of tax cuts, financial traders will eagerly await the publication of the plans that have been brought forward following pressure from Conservative MPs.
In a letter to Mr Stride, the Chancellor argued it would be inappropriate to publish the OBR’s initial analysis, stressing the need to provide a “full and final assessment of the impact of policy measures”.
The select committee chairman said he “strongly” welcomes the U-turn, saying it could result in smaller interest rate rises at the Bank’s next Monetary Policy Committee meeting.
Mr Kwarteng had sparked confusion during the Tory party conference last week when he denied his own allies’ suggestions that he would be bringing forward the plans. That came after he backed down on his widely-criticised plans to scrap the top rate of income tax on earnings over £150,000 during the Birmingham meeting of the party membership.
Former Cabinet minister Grant Shapps, an influential critic of the Government on the back benches, has welcomed the decision to bring the date of the financial statement forward. He said it was “a belated but sensible move given the urgent need to show markets the most transparent view of the UK economy”.
