Kwasi Kwarteng has told a group of City bosses today that the government is committed to “fiscal discipline” as the chancellor tries to calm markets and reassure the Square Mile.
Kwarteng told them that “we are confident in our long-term strategy to drive economic growth through tax cuts and supply side reform”, and that he will next month unveil a “credible plan to get debt to GDP falling”.
The meeting included executives from Aviva, Legal & General, Royal London, BlackRock, Fidelity and JPMorgan.
It came as the pound continues to tank against the US dollar, hitting a record-low yesterday, and a sell-off of UK bonds has led to a spike in long-term yields.
Both of these factors have increased the UK’s government’s debt repayment costs.
The Treasury yesterday released a statement to say the government will unveil a series of supply-side reforms next month and a plan to bring down government debt.
The Treasury said the reforms would include “changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure”, as well as post-Brexit changes to financial services regulation.
Kwarteng told the City meeting that he is meeting with Bank of England governor Andrew Bailey every day to come up with ways to stabilise markets.
“I’m confident that with our Growth Plan and the upcoming Medium Term Fiscal Plan – with close cooperation with the Bank – our approach will work.
“Big Bang 2.0 next month is a top priority of mine. We need to get the City and the UK back to where it always has been – the world’s foremost financial centre. There’s lots we can do in the financial services space to liberalise regulations that will drive economic growth.”