(Bloomberg) -- UK Prime Minister Rishi Sunak may delay an economic plan scheduled for Oct. 31 to give him time to square it with his agenda, Foreign Secretary James Cleverly said.
Treasury officials under Chancellor of the Exchequer Jeremy Hunt have been working toward finishing the so-called medium-term fiscal plan on time despite the leadership contest that catapulted Sunak into office on Tuesday.
It was announced last month by Hunt's predecessor, Kwasi Kwarteng, in an effort to calm markets that had been roiled by his previous tax-cutting strategy, which Hunt has largely since reversed. But after Sunak took power on Tuesday, he may need a bit more time, Cleverly told BBC radio on Wednesday.
“That date was set by the previous prime minister in the anticipation that she would be able to work throughout this period of time on that with the chancellor,” Cleverly said on BBC radio on Wednesday. “I don't know whether we're going to be able to stick with that, but we do know that people want to have certainty.”
Cleverly is the most senior government figure yet to suggest the highly-anticipated plan may be delayed. The Treasury hasn't commented on the date of the budget in public, neither confirming it will go ahead or endorsing the idea of a delay.
Development Aid
Sunak appointed his cabinet yesterday, keeping Hunt on to ensure continuity. The new prime minister will meet ministers on Wednesday before taking questions in the House of Commons for the first time as prime minister.
Hunt has already scrapped the bulk of the unfunded tax cuts outlined by Kwarteng and former Prime Minister Liz Truss on sept. 23. The Oct. 31 statement -- designed to outline how the government will balance the budget in the medium term -- also will include forecasts from the Office for Budget Responsibility, the government's fiscal watchdog whose estimates help guide investors and analysts.
Cleverly was also asked about the UK's development aid commitment, which Sunak cut to 0.5% of national income from 0.7% when he was Chancellor, and which has been touted as a candidate for further cuts. “I don't think we are envisaging that,” Cleverly said. He reiterated that the government's “ultimate desire” is to bring it back up to 0.7%.
While Sunak spent last night appointing people to serve in his government, Hunt spoke with Bank of England Governor Andrew Bailey to reconfirm his commitment to the central bank's independence over setting interest rates. The Treasury tweeted that Hunt and Bailey “agreed to work closely to restore confidence and stability.”
That comment brushed aside some of the friction the BOE felt with Truss, whose allies during her campaign to become prime minister pushed for a review of the central bank's mandate. Hunt hasn't mentioned that review since he took office. The Treasury usually updates its remit for the BOE in the budget statement.
Read more:
- UK Vote May Delay Fiscal Budget Plan in Snag for BOE, Markets
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