Kwasi Kwarteng 'confident' after mini-budget as Bank of England Chief warns of ‘significant’ response
27 September 2022, 16:35 | Updated: 14 October 2022, 13:29
Chancellor Kwasi Kwarteng has said he's 'confident' his economic strategy will work, as the Bank of England's Chief Economist warns of a 'significant’ response to the newly announced tax cuts.
Kwarteng made the comments during a meeting with top bankers – a meeting that was initially scheduled to discuss regulation within the city.
Sitting down with the heads of financial firms including Aviva, BlackRock and JPMorgan, the discussions came a day after the pound hit a record low against the US dollar – marking its lowest levels since 1985.
The reaction follows last week's mini-budget, which saw the newly appointed Chancellor introduce a host of measures, including scrapping of the 45p tax rate for around 660,000 of the highest earners.
Read more: Labour MP suspended from party after calling Kwasi Kwarteng 'superficially' black
The measures have prompted the Bank of England's Chief Economist, Huw Pill, to warn of a ‘significant’ response to the measures.
In simple terms, this news is likely to mean a notable increase in interest rates as a result of the tax cuts.
Pill also explained that he wanted to "flag clearly" that the government’s mini-budget announcement will “act as a stimulus” for the UK economy, forcing the bank to implement measures.
The economist also argued that the Bank of England should wait until its next scheduled meeting – which takes place during the first week of November – rather than announcing an impromptu emergency hike.
