Kwasi Kwarteng will present his plan to balance the government’s budget on October 31, about a month earlier than originally scheduled.
It is anticipated that the financial statement would clarify how the chancellor intends to pay for £43bn in tax cuts and debt reduction initiatives.
Concurrently, an independent forecast of the economy’s performance in future years will be issued.
Mr. Kwarteng had earlier stated that he would reveal his plans on November 23.
However, financial markets responded negatively to the absence of substance in his mini-budget presentation last month. Mr. Kwarteng’s unwillingness to provide a draught report by the Office for Budget Responsibility (OBR) to accompany the mini-budget on September 23 shook markets and several members of parliament.
Mr. Kwarteng’s fiscal statement will be released before the Bank of England makes its latest interest rate decision on November 3.
It is widely anticipated that the Bank’s Monetary Policy Committee (MPC) would raise interest rates for the ninth time since December, with many economists predicting a sharper increase than in the past.
However, Treasury Select Committee chairman Mel Stride tweeted that he hoped Mr. Kwarteng’s choice to share the report earlier will result in a reduced rate increase.
He posted on Twitter: “If markets respond positively, the MPC meeting on November 3 may result in a lesser increase in interest rates. Important for millions of homeowners.”
At the end of October, the independent budget watchdog OBR will issue a report accompanying Mr. Kwarteng’s comments. Its projections will indicate the financial health of the country.
The purpose of the chancellor bringing forward his explanation of how he expects to reduce government debt and the official watchdog’s assessment of his plans for Hallowe’en is to calm the market turbulence that has increased household and government borrowing costs.
Providing confidence on this matter will certainly include confirming unwelcome news for others. Even if the government can stimulate growth, the majority of economists believe it would need to make savings of at least £40 billion if it is to reduce its debt within a few years.
But by any standard, this is not pocket change; it exceeds the defense budget and will not be raised through efficiency savings. Numerous public services are already impeded by pandemic disruptions and escalating inflation. According to the Institute for Fiscal Studies, this means departments must allocate £18 billion from existing budgets to fund projected services.
In addition to this balancing act, they will have to prepare for a fresh round of austerity.
Borrowers have borne the cost of the market’s lack of confidence in the government’s intentions; millions more may bear the price of recovering it.
Last week, there was confusion after government sources told the media that Mr. Kwarteng would bring forward his budget statement to October, only for the chancellor and prime minister to contradict this the following day.
Tuesday, GB News questioned the chancellor, who stated that nothing had changed. He stated, “People have been reading the runes and the pauses, and it will be the 23rd.”
However, Treasury officials emphasized that the chancellor would bring the statement forward and that it had only been waiting for the official announcement of the date change in Parliament.
Concerns that Mr. Kwarteng’s tax plans were unaffordable drove the pound to fall to a record low of $1.03 versus the dollar and the Bank of England to intervene to prevent the collapse of pension funds.
Since then, the government has been compelled to make a series of humiliating retreats in response to mounting criticism from its lawmakers.
On Monday, Mr. Kwarteng reversed his decision to reduce the maximum income tax rate.
