UK: Finance minister Kwarteng to publish fiscal plan and economic forecasts on October 31

On Monday, the British finance minister Kwasi Kwarteng said that he will publish the fiscal plans and economic forecasts for the UK on October 31. This comes amid the pressure of rebuilding investor confidence in the new government, ballooning government debt and calming the rattled market.

Kwarteng announced that he is preponing his midterm budget by more than three weeks as it was due on November 23, in a bid to reassure markets after his “mini-budget” blunder which crashed the country’s currency and sent shockwaves throughout the financial markets. This was after the new Prime Minister Liz Truss's cabinet announced 45 billion pounds of unfunded tax cuts.

Following the “mini-budget” announcement on September 23 the government borrowing costs surged, and bond prices collapsed, threatening Britain’s pension funds this is when the Bank of England was forced to intervene and take emergency action.

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ALSO READ:Report: UK central bank says pension funds nearly collapsed amid market meltdown

Prior to the mini-budget, Kwarteng refused to publish a draft report by the Office for Budget Responsibility (OBR) which reportedly caused an uproar among some members of Parliament as well as rattled the market. This comes after he had previously said that OBR would not have sufficient time to provide satisfactory forecasts on his “mini-budget” however they have since contradicted this.

The new date for the fiscal plan means the finance minister’s report will be released ahead of the central bank’s announcement on interest rates on November 3. According to the British finance minister, the October 31 date for his medium-term fiscal statement would also give the OBR to assess updates to official data, for a full forecast to take place.

ALSO READ:Liz Truss preparing for another U-turn; this time on welfare payments

Reportedly, Kwarteng and Truss are hoping that the OBR will back their claims that a combination of tax cuts and reforms on planning rules and immigration will boost the country’s economic growth. The OBR is an independent watchdog and will now publish a report alongside Kwarteng's statement, its forecasts will give a report on how the health of the nation’s finances faring.

Meanwhile, the International Monetary Fund (IMF) previously indicated that this push for economic growth and the central bank’s attempts to controlling inflation is working against each other. These remarks also came ahead of Kwarteng’s visit to Washington this week to attend the IMF's semi-annual meeting of global policymakers.

(With inputs from agencies)

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