The Fort Worth Press - Britain fast-tracks fiscal plans as Truss hangs by thread

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Britain fast-tracks fiscal plans as Truss hangs by thread
Britain fast-tracks fiscal plans as Truss hangs by thread / Photo: © AFP

Britain fast-tracks fiscal plans as Truss hangs by thread

Britain's new finance chief Jeremy Hunt will Monday bring forward fiscal measures to further calm markets turmoil, in another government U-turn that appears to have left Liz Truss's position as prime minister hanging by a thread.

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Chancellor of the Exchequer Hunt, parachuted into the job on Friday to replace sacked Kwasi Kwarteng, will at 1000 GMT trail measures from a fiscal plan due October 31.

Hunt, who is Britain's fourth finance minister in as many months, will also address lawmakers over his plans at 1430 GMT.

The news sent the British pound surging more than one percent against the dollar, while bond yields fell sharply on investor relief.

Truss fired her close friend Kwarteng on Friday after their recent tax-slashing budget sparked markets chaos, fuelling intense speculation over her political future one month after taking office.

Hunt's announcement "will support fiscal sustainability", the Treasury said in a statement, after last month's notorious budget had sent bond yields spiking and the pound collapsing to a record dollar low on fears of rocketing debt.

"This follows... further conversations between the prime minister and the chancellor over the weekend, to ensure sustainable public finances underpin economic growth," the Treasury added.

- 'Too far, too fast' -

Tax reductions were the centrepiece of the ill-starred budget, but they were financed via huge borrowing.

Truss has already staged two humiliating budget U-turns, scrapping tax cuts for the richest earners and on company profits.

Following his shock appointment, Hunt hit the ground running Saturday with a warning of tax hikes as he dramatically reversed course on right-wing Truss' radical programme of economic reform.

The mini budget on September 23 went "too far, too fast", he declared over the weekend.

And Hunt warned he was "not taking anything off the table" amid speculation of painful spending cutbacks on critical areas like defence, hospitals and schools.

Hunt met with the governor of the Bank of England and the head of the Debt Management Office to discuss his plans late on Sunday.

In the wake of turmoil, the BoE was forced to launch an emergency bond-buying policy but this ended on Friday.

The furore over the budget, which also contained a costly freeze on domestic energy prices to ease Britain's cost of living crisis, has reportedly sparked a plot to oust the prime minister.

British media reported that senior Conservative members of parliament were plotting to unseat Truss, aghast at the party's collapse in opinion polls since she replaced Boris Johnson on September 6.

Party grandee and former leader William Hague said Truss' premiership was "hanging by a thread" after Kwarteng was unceremoniously fired.

- Another U-turn -

Monday's news sent the UK's 30-year bond yield sliding to 4.46 percent.

"The bringing forward of the fiscal statement is in itself another U-turn, given that the government had been sticking to the Halloween date for its release, even on Friday," noted Hargreaves Lansdown analyst Susannah Streeter.

"But worries that the bond markets in particular will take fright again has prompted fresh urgency for damage limitation so a roll-back of planned tax cuts is now expected."

M.Cunningham--TFWP