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WorldJeremy Hunt to meet Liz Truss at Chequers to discuss economic plans

Date:

Jeremy Hunt to meet Liz Truss at Chequers to discuss economic plans

Prime Minister Liz Truss and Chancellor Jeremy Hunt will meet at Chequers today in an effort to restore the government’s economic confidence.
Mr Hunt, who took over for Kwasi Kwarteng, stated in statement that his priority was growth “underpinned by stability.”

He warned of possible tax rises and savings in public spending, saying the mini-budget went “too far, too fast”.

Pressure is growing on Ms Truss, with reports that a group of Conservative MPs is seeking to remove her as PM.

According to former Home Office special adviser Mo Hussein, there are “definitely moves afoot behind the scenes”.

“People have been organised, some of the bigger names are getting their supporters in line,” he told BBC Breakfast, adding that the next few days would be tumultuous.

Talks of plans to oust Ms Truss come amid a series of interviews with her new right-hand man on Saturday.

Mr Hunt signalled a shift away from Ms Truss’s tax-cutting agenda and indicated he would reverse some of the key pledges made by his predecessor Mr Kwarteng, who was sacked on Friday.

He said this was necessary to ensure stability in the financial markets.

“Taxes are not going to come down by as much as people hoped, and some taxes will have to go up,” the chancellor told BBC Radio 4’s Today programme. “I’m asking all government departments to find additional efficiency savings.”

It comes as the Times reported that Mr Hunt planned to delay by a year a 1p cut to the basic income tax rate – a flagship part of the 23 September mini-budget.

However, the Treasury has so far refused to confirm the report, with a spokesman saying: “We cannot speculate on any tax changes outside of a fiscal event.”

A view of Chequers, the official country residence of the prime minister
IMAGE SOURCE, REUTERS Image caption, Truss and Hunt are meeting at Chequers, the official country residence of the prime minister

Mr Hunt is due to outline the government’s refreshed economic plan in a statement on 31 October, a task his predecessor was building up to following the aftermath of his mini-budget.

In his latest statement, released on Saturday night, Mr Hunt said: “My focus is on growth underpinned by stability. The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world-class public services. But we went too far, too fast.

He also said he intended to be “honest with people” about the “very difficult decisions” that had to be made “both on spending and on tax to get debt falling”.

“I will set out clear and robust plans to make sure government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances,” Mr Hunt added.

Meanwhile, the PM’s authority has come under increasing pressure – with some Tory MPs telling the BBC’s Laura Kuenssberg Mr Hunt’s appointment means Ms Truss is “in office, but not really in power”.

The prime minister’s hopes of survival could hinge on what she and her chancellor decide over the next two weeks.

There will be a budget at the end of the month that needs to convince financial markets and prove politically palatable to a fuming, mutinous Tory party.

Today’s meeting at the prime minister’s country residence is their first chance to have detailed discussions about the government’s new fiscal plan – which is expected to junk the tax-cutting agenda Liz Truss promised during the Tory leadership contest.

Jeremy Hunt has been clear that nothing is off the table and that tax rises and spending cuts will be needed. But many Conservative MPs are furious Liz Truss has led the government into this chaos and are talking privately about trying to turf her out.

One former minister predicted Ms Truss would be gone within weeks – but for now, she limps on, hoping the current turmoil subsides.

The imminent talks come as Andrew Bailey, the governor of the Bank of England, warned that interest rates may need to be raised higher than previously expected in order to keep UK inflation under control.

“As things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August,” Mr Bailey said in Washington, less than three weeks before the Bank’s monetary policy committee is due to meet.

Turning to his initial conversations with the new chancellor, Mr Bailey described an “immediate meeting of minds on the importance of stability and sustainability”.

Elsewhere in the US, President Joe Biden weighed in on the political situation in the UK, saying he “wasn’t the only one that thought it was a mistake” when asked about Ms Truss’s original economic plan.

He called the outcome “predictable” but said, while he disagreed with the prime minister’s policies, it was up to the British people.

Mr Biden also dismissed concerns about the strength of the dollar. “The problem is the lack of economic growth and sound policy in other countries,” he told a White House pool reporter.

Following the mini-budget, the pound plummeted to a record low against the dollar and the cost of government borrowing climbed as markets reacted to the package – which was not accompanied by an official assessment of how the UK economy would perform.

 

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