Kwasi Kwarteng tries to reassure city bosses about UK economy

Chancellor Kwasi Kwarteng tells leading bankers, insurers and asset managers he is “confident” his economic strategy will work as he tries to appease the City of London turbulent days in financial markets.

The meeting between Kwarteng and the heads of companies including Aviva, Legal and General, Royal London, BlackRock, Fidelity and JPMorgan comes a day after sterling hit a record low against the dollar in response to a small announcement by the Chancellor of the Exchequer last week. Budget.

Kwarteng used the meeting, ostensibly to arrange a discussion of regulatory reforms in the city, in an attempt to reassure top bankers and investors that he was on top of the situation.

The chancellor said he would meet with Bank of England Governor Andrew Bailey every day to try to stabilize markets. “We are working closely together,” he said.

Sterling rose against the dollar on Tuesday after falling sharply the previous day, but remained near its lowest level since 1985 at $1.08.UK government borrowing costs having class now It was one of their biggest monthly gains ever, and the mortgage lenders on Monday stop offering New home loans due to market volatility.

Kwarteng said he remained committed to controlling debt and insisted his £45bn tax cut – which would be financed by borrowing – would boost growth in the medium term.

“We are confident in our long-term strategy to drive economic growth through tax cuts and supply-side reforms,” ​​he said. “Supply-side reform is critical – increasing capacity lowers prices.”

In a readout of the meeting issued by the Ministry of Finance, Kwarteng also told city leaders: “We are committed to fiscal discipline and will not reopen spending reviews.”

He said he would unveil “a credible plan to bring debt down as a percentage of GDP” on Nov. 23, along with projections from the Independent Budget Responsibility Office.

“We took an expansionary fiscal stance on energy in the short term because we had to,” Kwarteng said. “Faced with two external shocks – Covid-19 and Ukraine – we had to intervene. Our 70-year high tax burden was also unsustainable.

“I am confident that through our growth plan and the upcoming medium-term fiscal plan – working closely with the Bank – our approach will work.”

The chancellor also said that implementing the so-called Big Bang 2.0 reform package for New York City is a top priority. Details are expected in the coming weeks.

Kwarteng has already announced the removal of caps on bankers’ bonuses, telling financial services leaders that he will “address” Solvency II, EU regulation on the insurance industry.

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