Kwasi Kwarteng today promised his Halloween fiscal plan will be “upbeat” amid widespread speculation he will unveil spending cuts.
The chancellor batted away a series of questions in the House of Commons around whether he will introduce real-terms cuts to benefits and promised more details would be unveiled on 31 October.
The Treasury has said the Medium Term Fiscal Plan on 31 October will show how the government will return to fiscal responsibility.
It is widely expected this will mean future spending cuts, after a £100bn+ energy package and £43bn in tax cuts in the past month have been funded by more government borrowing.
When asked about the fiscal plan, Kwarteng said: “It will be relentlessly upbeat.
“There will be an absolutely iron commitment to fiscal responsibility.”
It has been widely speculated that Kwarteng is considering breaking a Boris Johnson-era promise to increase benefits in line with inflation in a bid to cut future spending.
However, several cabinet members and a growing number of Tory MPs are against the measure.
The chancellor said that he will announce his decision as a part of the Medium Term Fiscal Plan and that “I am not going to pre-judge any measures in it”.
It comes as the International Monetary Fund (IMF) today said high inflation will last for longer in the UK than other large economies, due to the policies of Kwarteng and Liz Truss since entering office a month ago.
“The fiscal package is expected to lift growth somewhat above the forecast in the near term, while complicating the fight against inflation,” the IMF said.
“Unfunded government spending increases or tax cuts will only push inflation up further and make monetary policymakers’ jobs harder.”
The package of debt-funded tax cuts led to the Pound crashing against the US dollar and for the price of long-term government bonds to also crash, sending yields on the gilts soaring.
The Pound has since recovered, however long-term yields are still far higher than before the mini-Budget.
This means government debt repayment costs have soared, while the market shock caused by the mini-Budget forced the Bank of England to step in and buy up £65bn of bonds to ensure financial stability.
The central bank was forced to extend the programme further today and buy a further £5bn of index-linked bonds as markets feared a cliff edge end of the programme.
Labour shadow chancellor Rachel Reeves accused Kwarteng of “sabotaging” the UK’s “economic credibility” in the House of Commons today.
She asked: “Are the chancellor and the Prime Minister the last people left on Earth who actually think that their plan is working?”
Hitting back, Kwarteng said: “It is very clear where we stand on this, we have got pro-growth, pro-enterprise, pro-business Conservatives on one side and the anti-growth coalition on the other side who want to tax more and want to commit us to low growth.”