New UK Prime Minster Rishi Sunak delayed an economic strategy announcement planned for Monday until Nov. 17 as he sought more time to make the “right decisions” on managing the British economy.
(Bloomberg) — New UK Prime Minster Rishi Sunak delayed an economic strategy announcement planned for Monday until Nov. 17 as he sought more time to make the “right decisions” on managing the British economy.
The delay from Oct. 31 was announced in a readout of Wednesday’s Cabinet meeting issued by Sunak’s office. The government also upgraded the status of the program from a “medium-term fiscal” plan to an Autumn Statement — a form of interim mini budget.
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The delay means the Bank of England will now make its next interest rates decision on Nov. 3 without the benefit of knowing the full direction of travel the government is setting for the economy. But Chancellor of the Exchequer Jeremy Hunt told broadcasters that it was important to allow for time to make enduring choices on the direction of the economy, and that he had discussed the timing with the central bank.
“This is my recommendation to the prime minister as the best way to ensure that the decisions we take, these very, very difficult decisions are ones that stand the test of time,” Hunt said. That will “give us the best chance of giving people security over their mortgages, over their jobs, over the cost-of-living concerns everyone has,” he said.
Sunak told his cabinet that the statement will “set out how we will put public finances on a sustainable footing and get debt falling in the medium term and will be accompanied by a full forecast from the Office for Budget Responsibility,” according to the readout.
The plan was initially announced by Hunt’s predecessor, Kwasi Kwarteng, in an effort to calm markets that had been roiled by his previous tax-cutting strategy, which Hunt has largely since reversed. Kwarteng had planned it initially for late November, but later brought it forward in an effort to restore market stability.
Sunak appointed his Cabinet yesterday, keeping Hunt on to ensure continuity. The new prime minister met his top team of ministers for the first time on Wednesday and is due to take questions in the House of Commons for the first time as prime minister at 12 p.m.
Hunt has already scrapped the bulk of the unfunded tax cuts outlined by Kwarteng and former Prime Minister Liz Truss on Sept. 23.
Foreign Secretary James Cleverly earlier on Wednesday hinted at the delay in a series of broadcast interviews. He was asked on BBC radio about the UK’s development aid commitment, which Sunak cut to 0.5% of national income from 0.7% when he was Chancellor, and which has been touted as a candidate for further cuts. “I don’t think we are envisaging that,” Cleverly said. He reiterated that the government’s “ultimate desire” is to bring it back up to 0.7%.
–With assistance from David Goodman and Reed Landberg.
(Updates with Hunt comment starting in third paragraph)
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