London, (Samajweekly) Responding to mounting pressure, the British Treasury has decided to bring forward the date of its debt-cutting plan, alongside forecasts for public finances, to October 31.
The announcement of the government’s medium-term fiscal plan, together with an economic and fiscal forecast by the independent fiscal watchdog Office for Budget Responsibility (OBR), had originally been scheduled for November 23, but the government has faced huge pressure to act faster to reassure markets, reports Xinhua news agency.
In September, Chancellor Kwasi Kwarteng unveiled his ambitious plan to cut taxes and boost economic growth, but it has raised severe concern over the country’s fiscal health and dented confidence in its economic future.
Following the plan, the British pound tumbled and government borrowing costs soared.
OBR forecasts were not published alongside the September fiscal statement, and the government was accused of avoiding scrutiny.
“Given the size of this package, it is all the more remarkable — and concerning — that it was announced without an update” from the OBR, Thomas Pope, Deputy Chief Economist of the think tank Institute for Government, said on Monday.
In the wake of market turmoil, the Bank of England (BoE) has announced temporary purchases of long-dated UK government bonds in an emergency move to restore orderly market conditions.
Auctions started in late September and will take place on each weekday until October 14.
In this final week of operations, the central bank has announced additional measures to “support an orderly end of its purchase scheme”.
The BoE said on Monday that it was prepared to increase the maximum size of the remaining five auctions and it will launch a facility to ease liquidity pressures facing the UK’s pension funds.
