London, October 26
Britain’s new Prime Minister Rishi Sunak on Wednesday delayed the announcement of a keenly awaited plan for repairing the country’s public finances until November 17, two and a half weeks later than previously planned.
Will always protect the vulnerable
My record is, when times are difficult in this country I will always protect the most vulnerable. We did it during the Covid pandemic and we will do that again. Rishi Sunak, UK PM
The delay, Sunak’s first policy decision since taking over from Liz Truss on Tuesday, briefly raised British borrowing costs in financial markets but there was no repeat of the panic bond selling caused by Truss’ September tax-cutting plan.
Sunak takes on an economy facing recession at a time when the Bank of England is raising interest rates to tame double-digit inflation. Low growth and rising borrowing costs have worsened the strain on already stretched public finances.
The government is drawing up spending cuts and cancelling tax cuts just as the rising cost of mortgages, food, fuel and heating is squeezing many household budgets to their limits. “I have been honest. We will have to take difficult decisions to restore economic stability and confidence,” Sunak told Parliament, promising to protect the most vulnerable.
“The Chancellor (Jeremy Hunt) will set that out in an autumn statement in just a few weeks,” he said.
Finance Minister Hunt said more time was needed to ensure the new plan took into account new economic forecasts. It is expected to set out how the government will plug a budget shortfall of as much as 40 billion pounds ($46 billion).
Unlike Truss’ plan last month, it will be fully audited by Britain’s fiscal watchdog.
Sunak warned that his government would have to take some “very difficult decisions” but assured the people that he would also act with compassion while tackling the country’s “profound economic crisis”. He pledged to fix the “mistakes” his predecessor Liz Truss made which left a blackhole in government finances and the markets in turmoil.
Sunak, the third PM in seven weeks, opened the Cabinet meeting by saying that “economic stability and fiscal sustainability would be at the heart” of his government’s mission. “This morning, I set out to Cabinet the enormous task we face, and why I am confident that this government can rise to the challenge and deliver for the whole United Kingdom,” Sunak tweeted.
“Now is the time to get to work and earn the trust of the British people,” he wrote after the first Cabinet meeting.
Foreign Secretary James Cleverly updated the Cabinet on the international situation and the continued threat posed by Russia’s escalation of the war in Ukraine. — Agencies
