UK finance minister promises ‘credible plan’ to reduce debt

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Britain’s under-fire finance minister Kwasi Kwarteng has vowed to unveil “a credible plan” to cut public debt as he defends his controversial mini-budget that has caused market turmoil.

Last month’s controversial tax cut plans, which will dramatically increase government borrowing, went further than expected, abolishing the top income tax rate and lifting the cap on bankers’ bonuses.

This immediately shook financial markets, with the pound falling to an all-time low against the dollar.

Kwarteng insisted his ministry will unveil a “medium-term fiscal plan” next month that will chart the way for reduced borrowing, alongside “new fiscal rules and a commitment to spending discipline.”

In an article for the The telegraph of the day Released on Friday evening, it noted that a comprehensive forecast from the country’s fiscal watchdog, the Office for Budget Responsibility (OBR), would also accompany the plan on November 23.

The lack of an OBR forecast was cited as one of the reasons for the market uproar following the September 23 release of the mini-budget, which cut taxes for the wealthy amid a cost crunch. of life.

The turmoil forced the Bank of England to intervene urgently to stabilize the situation, amid fears of a collapse of British pension funds.

Opposition politicians, independent analysts and even some conservative lawmakers have called the plans reckless and counterproductive.

But Kwarteng insisted the package is key to bringing the UK, which is imminently set to fall into recession, back to economic growth.

“Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice,” he reiterated in his Telegraph article.

‘Iron Fist’

However, at the same time the article was published online, ratings agency S&P said it had revised its outlook for the UK from “stable” to “negative” following the fallout from the mini-budget.

He spoke of the risk that “economic growth in the UK turns out to be weaker due to further deterioration in the economic environment, or if government borrowing costs rise more than expected.”

It comes days after rival ratings agency Moody’s warned Kwarteng’s fiscal strategy was ‘credit negative’ and could ‘permanently weaken the UK’s debt affordability’.

Prime Minister Liz Truss has also faced heavy criticism over the economic package.

After nearly a week of silence, she faced a grueling series of interviews on BBC radio and regional television on Thursday, before writing her own newspaper article in The Sun published overnight .

In it, she acknowledged for the first time that the plans had caused “short-term disruption”, but vowed to pursue them and manage public money with “an iron fist”.

A poll on Friday found half of Britons think she should quit – less than four weeks after taking office – while support for the mini-budget has been in single digits in some surveys.

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