Kwasi Kwarteng will be hoping his medium term tax plans won’t spook the markets on the last day of October (Joe Giddens/PA)
(Picture: PA Wire)After giving the markets a scare with its so-called “mini-Budget”, the government has chosen October 31 as the publication date for its next set of tax and spending plans and economic forecasts from the Office of Budget Responsibility.
Chancellor Kwasi Kwarteng will outline his medium-term fiscal strategy on Halloween. There will also be an OBR forecast alongisde the plans. His previous set of measures lacked oversight from the independent tax and spending watchdog, one of the main reasons behind the dizzying sell-off in UK assets that followed the September 23 announcements.
News of the earlier date came on the same day as the Bank of England announced it increased its spending to support the UK government debt market, which came in response to the mini-Budget sell-off, to £10 billion. The BoE also said it was adding “additional measures” to its scheme ahead of its scheduled end on Friday.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, called the moves from the BoE and the Treasury “ a two pronged attempt to calm markets,” adding:
“Policymakers and politicians are clearly nervous about seeing a repeat of the mini-financial crisis unleashed following the presentation of the Truss administration’s slash and spend plans and fresh moves are being made to try and repair the damage.”
The BoE intervention buys long-dated gilts to shore up their prices so that pension funds can offload the debt to meet their complex financial arrangements. The collapse in the price of UK debt after the mini-Budget stoked concern of a financial crisis in the sector. Investors will be watching closely for signs of further stress when the support is withdrawn.
The confirmation of the next set of updates from the Treasury brings them forward slightly from early-to-mid November, after pressure for detail from investors and and the markets alike.
Streeter warned: “All eyes will be on the independent assessment of his spending plans, and the risk is that if the numbers don’t add up, the markets could take fright again on Halloween.’’
