Chancellor Jeremy Hunt has brought forward fiscal measures to calm markets and bring stability to public finances.
In an update this morning (17 October) the Treasury said Hunt will also make a statement in the House of Commons.
This follows the prime minister’s announcement on Friday (10 October), and further conversations between the Liz Truss and the Hunt over the weekend.
The statement adds: “The chancellor will then deliver the full medium-term fiscal plan to be published alongside a forecast from the independent Office for Budget Responsibility on 31 October.”
The latest development follows the sacking on Kwasi Kwarteng as finance minister last week and continuing market turmoil.
The cut to the top 45p rate of income tax and reduction in corporation tax have been reversed.
Reacting to the news Hargreaves Lansdown senior investment and markets analyst Susannah Streeter says: “New chancellor Jeremy Hunt has the air of a troubleshooting teacher brought in to turn around a failing school and faces his first big presentation test today with an emergency budget plan wheeled out to try and calm financial markets.
“This is all part of his charm offensive to instill confidence in the government’s ability to be fiscally responsible, but behind him unruly pupils are still scheming to oust the beleaguered head.
“The bringing forward of the fiscal statement is in itself another U-turn, given that the government had been sticking to Halloween date for its release, even on Friday.
“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.
“It looks highly likely that the 1p cut in the base rate of income tax set to be postponed, we could see changes to the new VAT-free shopping scheme for tourists, and possibly a reversal of plans to relax the way tax is collected from self-employed people.
“We could even see a rise in VAT. But filling the black holes in the government’s finances will be far from easy so highly unpalatable spending cuts across government departments are also expected.”
