UK: Newly appointed finance minister vows to fix the budget
After Prime Minister Liz Truss’ initial economic proposals precipitated a collapse in the bond market, Britain’s new finance minister, Jeremy Hunt, promised to demonstrate to investors that he would restore the nation’s public finances.
“No government can control the markets. No Chancellor should seek to do that,” Hunt told BBC television in an interview broadcast on Sunday.
“There is one thing we can do and that’s what I’m going to do, which is to show the markets, the world, indeed people watching at home, that we can properly account for every penny of our tax and spending plans.”
Since September 23, when Hunt’s predecessor as finance minister, Kwasi Kwarteng, promised a series of unfunded tax cuts, investors have sold a significant amount of British government bonds.
Truss, who gained the Conservative Party’s leadership less than a month ago on the promise to cut taxes, sacked Kwarteng on Friday and abandoned a significant portion of the plan they developed together.
Hunt, though, has stated that he will go farther, including tax rises and tighter controls on public expenditure.
Asked whether he thought financial markets would have confidence in his plans, Hunt told the BBC: “Well, I think, you know, for people trading the markets, actions speak louder than words.”
On Monday morning, when trade in Britain’s battered government bonds starts without the assistance of the Bank of England’s emergency bond-buying programme, which concluded on Friday, a first test will take place.
(With inputs from agencies)
