UK PM Sunak could delay Oct 31 fiscal statement – foreign minister

Britain’s new Prime Minister Rishi Sunak waves as he enters Number 10 Downing Street, in London, Britain, Oct 25, 2022. REUTERS/Henry Nicholls/File photo

LONDON  -Britain’s new Prime Minister Rishi Sunak could delay the announcement of a plan to repair the country’s public finances, foreign minister James Cleverly said on Wednesday, suggesting a little more time might be needed to spell out the details.

Sunak, who replaced Liz Truss after her brief stint as prime minister was engulfed in chaos, gathered his cabinet for the first time on Wednesday, a day after taking power with a promise to fix his predecessor’s mistakes and stabilise the economy.

At the top of Sunak’s agenda will be preparation for a fiscal statement, keenly anticipated by financial markets, but which The Times newspaper reported could be pushed back by a few days.

Asked about the timing of the statement, currently scheduled for Oct. 31 and expected to set out how the government will plug a budget shortfall of as much as 40 billion pounds ($45.88 billion), Cleverly did not confirm the date.

“What we want to do is make sure that we get that right,” Cleverly told BBC television. “If that means a short delay, in order to make sure that we get this right, I think that that is not necessarily a bad thing at all.”

Investors did not appear fazed by the possible delay. Sterling was trading up by nearly 1 percent against the U.S. dollar, extending its recent recovery, and British government bond prices were little changed.

Asked to confirm the date of the statement, Sunak’s office pointed to Cleverly’s comments.

Britain’s financial credibility was shaken last month when Truss announced a program of unfunded tax cuts, triggering a bond market rout so severe the Bank of England had to intervene and Truss was forced into a U-turn.

On the fiscal statement, Cleverly told Sky News in a separate interview: “We know it needs to come soon. We know people want certainty. We know people want a clearer idea of the government’s plans.”

Any delay could affect the BoE’s plans as it ponders its interest rate announcement due on Nov. 3 and prepares to begin selling bonds from its quantitative easing program on Nov. 1. The start of those bond sales was pushed back by a day last week to accommodate the fiscal statement.

Decision-making

As Britain’s third prime minister this year, Sunak faces a daunting list of problems including what he called a “profound economic crisis” and uniting a fractured party whose reputation has been shredded by months of scandals and rows.

He began on Tuesday by re-appointing Jeremy Hunt as finance minister. Hunt was drafted in last week by Truss to reverse her tax-cutting plans and calm financial markets which has so far largely worked.

Beyond that, Sunak put together a cabinet with a mix of views from across the Conservative Party’s political factions.

His decision-making immediately came in for criticism from the opposition Labour Party, which highlighted the reinstating of lawmaker Suella Braverman as interior minister less than a week after she was sacked by Truss for a security breach.

That decision will likely come into focus later in the day when Sunak will for the first time face the opposition Labour Party leader Keir Starmer for Prime Minister’s Questions – the weekly showpiece political debate in parliament at 12 noon (1100 GMT).

After Sunak promised in his first speech as prime minister to lead with integrity and accountability, some Labour lawmakers have accused him of cutting a backroom deal with Braverman to give her one of the biggest jobs in government in exchange for her support in his leadership bid.

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