January 30, 2023

Source: bbc.com

Chancellor Jeremy Hunt is to fast-track many billions of pounds worth of tax and spending measures from his debt plan, announcing them a fortnight earlier than expected.

The Treasury will outline details of the plans later on Monday.

It is the latest of a series of U-turns on policies announced in the mini-budget.

The move is designed to help reassure jittery markets before they open in London.

The pound gained around 1% on Monday to trade above $1.13. The news also saw the interest rate – or yield – on UK government bonds fall.

The announcement of the £18bn U-turn on corporation tax on Friday and the firing of Kwasi Kwarteng as chancellor did not calm rising UK government borrowing costs.

On Sunday, Mr Hunt told the BBC that nothing was off the table.

Announcements by lunchtime and then a statement to the House of Commons will see many billions more in reversals of policy, to plug a hole in borrowing forecasts worth tens of billions.

“The chancellor will make a statement later today, bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability,” a Treasury spokesman said.

The cut to National Insurance is expected to survive, as it has already very nearly passed through Parliament.

More clarity on the extent of savings in public sector spending could also be on the cards.

The Treasury has confirmed that the measures brought forward from the debt plan “will support fiscal sustainability”.

There have been further conversations between the chancellor and the prime minister. Mr Hunt also met the Governor of the Bank of England, Andrew Bailey and the head of the Debt Management Office, which has to sell Britain’s debt, to brief them on his plans.

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Monday’s moves, which could amount to a significant fiscal event in and of itself, are designed to reinject market confidence.

The debt plan will still be published in a fortnight’s time on 31 October, alongside an official forecast from the Office for Budget Responsibility.

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