UK Treasury Secretary Kwasi Kwarteng has denied reports that he plans to bring forward his budget presentation. A statement he made the night before at the British Conservative Party Conference in Birmingham had been misinterpreted, the conservative politician made clear in an interview with GB News. Kwarteng had said the budget would be published “soon”. But by that he meant November 23, Kwarteng clarified.
Several British media had previously reported, citing insiders, that the government wanted to bring forward the budget in order to regain financial market confidence. An announcement of far-reaching tax cuts, which should primarily benefit high earners, had previously caused turbulence on the financial markets. The main problem was that it was not clear how the plans were to be counter-financed. The pound’s exchange rate against the dollar plummeted. The Bank of England was forced to buy long-dated government bonds to keep pension funds from collapsing. The conservative ruling party’s polls plummeted.
Under pressure from within its own party, the government reversed the abolition of the top tax rate on Monday. However, further measures were expected to strengthen confidence in the government’s financial competence. In its budget, the government wants to explain how the tax cuts are to be financed. The hope is that this will stop the flight of investors, stabilize the pound and halt the decline in government bonds. The markets had therefore initially reacted positively to the reports that the budget would be brought forward. At the very least, Kwarteng’s denial shouldn’t increase confidence.
But there are already other sources of conflict in the conservative Tory party. Pressure is mounting on Prime Minister Truss to adjust social benefits to inflation, as announced by her predecessor Boris Johnson. So far, Truss has carefully avoided repeating that promise in interviews.
