Watch: Kwarteng shrugs off ‘little turbulence’ after U-turn over tax cut for rich
The chancellor will accelerate the publication of his medium-term fiscal plan to later this month and not on November 23, in a second U-turn on his radical ‘mini-budget’ that was unveiled just 10 days ago.
And the Financial Times reported on Monday evening that Mr Kwarteng will attempt to reassure the febrile markets further by publishing his debt plan in October.
It comes after Downing Street was forced to reassure that Liz Truss still backs Mr Kwarteng.
The under-pressure Mr Kwarteng admitted in a speech to the Conservative party conference in Birmingham on Monday: “It has been tough, but we need to focus on the job in hand. We need to move forward. No more distractions.”
He admitted his fiscal statement had caused “a little turbulence” with mortgage rates continuing to ratchet up for millions. The average two-year fixed rate is now close to 6%.
Last week the Bank of England was forced to make a £65bn intervention in the bond market to keep pensions afloat.
Mr Kwarteng went on to the “hullabaloo” and the “market reactions and the excitement” that followed his mini-budget, while giving a brief speech at a drinks reception for the PolicyExchange think tank.
Opposition MPs accused the Chancellor of “laughing” at the chaos, with Labour warning of a “huge economic body blow to working people that will mean higher prices and soaring mortgages”.
Despite £65 billion of Bank of England action to stave off fresh financial turmoil and the pound having plummeted over his mini-budget on September 23, Mr Kwarteng insisted the Tories will be “serious custodians of the public finances”.
And he insisted the Conservatives will “always be on the side of those who need help the most” despite tax policies immediately favouring the rich more than the rest of society.
Hours earlier, in announcing the U-turn, the Chancellor acknowledged that the Government’s desire to borrow billions to axe the top income tax rate had become a “terrible distraction”.
Mr Kwarteng said he had “not at all” considered resigning.
Asked if Ms Truss has confidence in her Chancellor, the Prime Minister’s official spokesman told reporters: “Yes.”
Business Secretary Jacob Rees-Mogg, a day after defending the policy, also stood by Mr Kwarteng, saying “of course he shouldn’t resign” and insisting it was not a “handbrake turn”.
“It was a political reality. Sometimes things we want to do don’t receive the approbation of the nation that you would hope for,” he told a Telegraph event at the conference.
“There is no point in sticking with them stubbornly if there simply isn’t the desire and appetite to do them. We live in a democracy and politicians have to be responsive to the democratic will.”