Despite turmoil, UK Treasury chief says economic plan stays

Oct 13, 2022, 3:52 AM | Updated: 8:56 pm
In this handout photo provided by UK Parliament, Britain's Prime Minister Liz Truss speaks during P...

In this handout photo provided by UK Parliament, Britain's Prime Minister Liz Truss speaks during Prime Minister's Questions in the House of Commons in London, Wednesday, Oct. 12, 2022. (Jessica Taylor/UK Parliament via AP)

(Jessica Taylor/UK Parliament via AP)

LONDON (AP) — Britain’s Treasury chief on Thursday rejected suggestions that the Conservative government would reverse course on economic plans that have roiled financial markets even after Prime Minister Liz Truss faced widespread criticism from her own lawmakers during a closed-door meeting.

Treasury chief Kwasi Kwarteng flatly ruled out a U-turn on the government’s economic growth plan, despite investor concerns that 43 billion pounds ($48 billion) of unfunded tax cuts will push public borrowing in Britain to unsustainable levels and fuel inflation. Kwarteng announced the plans three weeks ago when he delivered a “mini-budget” to the House of Commons.

“Our position hasn’t changed,” Kwarteng told the BBC in Washington, where he is attending the International Monetary Fund’s annual meeting. “What I’m totally focused on is delivering on the mini-budget.”

Truss spokesman Max Blain said Thursday that the government was committed to the economic plan it set out last month, but would not comment on any specific measures in it. He said he did not want to pre-empt Kwarteng’s Oct. 31 statement.

However, Truss is considering whether to drop other elements of the tax-cutting plan. The Financial Times reported talks between her Downing Street office and the Treasury were underway, with speculation it would include abandoning the commitment to axe a planned increase in corporate tax. So far, the government has only reversed course on 2 billion pounds ($2.27 billion) in cuts.

The comments came after Conservative Party lawmakers blasted Truss on Wednesday evening for pursuing a strategy they said benefits the wealthy at the expense of the working class voters who handed the party a landslide victory in 2019. Truss has “trashed the last 10 years of workers’ Conservatism,” British news organizations quoted Robert Halfon, chairman of the House of Commons Education Committee, as saying.

The government argues that the proposed tax cuts will stimulate economic growth, which will in turn generate increased tax revenues to pay for public services.

But investors are concerned because Truss’ Conservative government hasn’t provided any independent analysis on how the plan will affect borrowing and debt levels.

That sent the pound plunging to a record low against the dollar on Sept. 26, although it has since recovered. The Bank of England has stepped in to stabilize the bond market after sharp increases in bond yields threatened some pension funds. Rising interest rates are also squeezing borrowers, making it more difficult for people to buy home and refinance mortgages.

Under pressure to stabilize financial markets, Kwarteng said earlier this week that he would release further details on the government’s economic plan and its impact on public finances by the end of this month. That’s three weeks earlier than planned.

With talks on altering the package rumored to be under way back home, Kwarteng insisted his position was safe. Asked if he and Truss would still be in office in a month, he said: “Absolutely 100%. I am not going anywhere.”

Earlier, Foreign Secretary James Cleverly also rejected suggestions that Truss would step down.

“I think that changing the leadership would be a disastrously bad idea, not just politically but also economically,” Cleverly told the BBC. “And we are absolutely going to stay focused on growing the economy.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Medical workers in protective overalls walk past a line outside the fever clinic of a hospital in B...
Associated Press

China struggles with COVID infections after controls ease

BEIJING (AP) — A rash of COVID-19 cases in schools and businesses were reported by social media users Friday in areas across China after the ruling Communist Party loosened anti-virus rules as it tries to reverse a deepening economic slump. Official data showed a fall in new cases, but those no longer cover big parts […]
2 hours ago
FILE - Ukraine Finance Minister Serhiy Marchenko walks outside of the International Monetary Fund (...
Associated Press

Helping Ukraine is ‘self-preservation,’ finance chief says

FRANKFURT, Germany (AP) — Ukraine’s finance minister says crucial Western financial support is “not charity” but “self-preservation” in the fight to defend democracy as his country deals with growing costs to repair electrical and heating infrastructure wrecked by Russian attacks. Serhiy Marchenko also told The Associated Press in an interview Thursday from Kyiv that he […]
2 hours ago
People walk by monitors showing an exchange rate of the Japanese yen against the U.S. dollar at a s...
Associated Press

Asian shares advance on back of Wall Street gains

BANGKOK (AP) — Shares rose in Asia on Friday after an advance on Wall Street led by the latest rally in technology companies. Chinese benchmarks rose on reports the government is planning new measures to support the ailing property sector, which has dragged on growth over the past several years. The relaxation of some of […]
2 hours ago
A general view of pupils during lunch hour at Hillstone Primary School, in Birmingham, England, Wed...
Associated Press

UK cost-of-living woes stir push for more free school meals

BIRMINGHAM, England (AP) — As the school bell rings, dozens of children begin filing into the canteen at Hillstone Primary School. The day’s offering, a roast dinner, is a popular one, and many are eager to tuck into their plates of turkey slices, roasted potatoes, broccoli and gravy. For some children in this area of […]
2 hours ago
Cargo trucks move into a port in Busan, South Korea, Friday, Dec. 9, 2022. Thousands of South Korea...
Associated Press

South Korean truckers end 16-day strike over freight rates

SEOUL, South Korea (AP) — Thousands of South Korean truckers are returning to work after voting Friday to end their 16-day walkout that disrupted construction and other domestic industries. Thousands of truckers seeking financial protections as fuel prices rise went on strike Nov. 24. The government took aggressive steps to minimize interruptions such as by […]
2 hours ago
FILE - Space flight participant Yusaku Maezawa attends a news conference ahead of the expedition to...
Associated Press

K-pop star among 8 to join Japan tycoon Maezawa’s moon trip

TOKYO (AP) — Japanese billionaire Yusaku Maezawa said Friday that K-Pop star T.O.P. will be among the eight people who will join him on a flyby around the moon on a SpaceX spaceship next year. The Japanese tycoon launched plans for the lunar voyage in 2018, buying all the seats on the spaceship. He began […]
1 day ago

Sponsored Articles

Quantum Fiber

How high-speed fiber internet edges out cable for everyday use

In a world where technology drives so much of our daily lives, a lack of high-speed internet can be a major issue.
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.

Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.
Despite turmoil, UK Treasury chief says economic plan stays