The rushed return is fueling speculation in Britain that a reversal is imminent on the highly controversial mini-budget presented at the end of September
Britain’s finance minister Kwazi Kwarteng is returning to London a day early from Washington today, amid speculation about a possible reversal of London’s massive and unfunded fiscal measures that have panicked markets.
Kwarteng “is on the way back,” the British Treasury confirmed to AFP, noting that after “constructive meetings” he had in Washington, he will continue work on the medium-term budget plan, which is scheduled to be presented on October 31.
The British finance minister spent two days in the US capital, on the occasion of the autumn meetings of the International Monetary Fund, the World Bank and finance ministers and central bankers of the G20.
“It’s not uncommon for a minister to return a day early from an international visit,” Trade Minister Greg Hunts told Sky News today, clarifying that the key meetings Kwarteng would have attended had been completed.
However, this earlier-than-expected return is fueling speculation in Britain that a reversal is imminent on the highly controversial mini-budget presented at the end of September, which included massive boosts to energy bills and bold tax cuts.
The announcement of this growth plan triggered a spike in the cost of British debt and plunged sterling to an all-time low against the dollar, and set the Prime Minister Liz Truss under pressure.
Trying to reassure markets about a “significant risk to Britain’s financial stability”, the central bank has been forced to intervene several times since September 28 by buying long-term government bonds, but that intervention ends today, adding to the atmosphere concern.
Yesterday, Thursday, sterling soared against the dollar and UK government bond yields fell as the market appeared reassured by reports that a Downing Street reversal on fiscal measures was on the table .
But “the Chancellor of the Exchequer and the Prime Minister (Liz Truss) are absolutely determined to stick to their plans” when presenting the budget on October 31, Greg Hunts confirmed this morning.
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