Kwasi Kwarteng will announce a package of supply side reforms next month in a “medium-term fiscal plan”, the Treasury has announced.
The Treasury said it would include “changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure”, as well as post-Brexit changes financial services regulation.
It will also include details on the government’s fiscal rules and a clear plan to reduce government debt, after the government decided to fund its £45bn of tax cuts through increased borrowing.
It comes as Bank of England governor Andrew Bailey made an emergency statement in an attempt to calm markets, after Kwarteng’s package of tax cuts and reforms sent the pound tumbling to 40-year-lows.
Earlier today, City economists said the Bank needs to hike interest rates by the greatest amount since becoming independence this week to drag the pound from its record low against the greenback – a call which was not heeded by Bailey today.
The pound fell further against the US dollar after the two statements.
“Cabinet Ministers will announce further supply side growth measures in October and early November, including changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure,” the Treasury said.
“Next month, the chancellor will, as part of that programme, outline regulatory reforms to ensure the UK’s financial services sector remains globally competitive.
“He will then set out his Medium-Term Fiscal Plan on 23 November. The Fiscal Plan will set out further details on the government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium term.”
Bailey today said “the Bank is monitoring developments in financial markets very closely in light of the significant repricing of financial assets”.
“As the Monetary Policy Committee has made clear, it will make a full assessment at its next scheduled meeting of the impact on demand and inflation from the Government’s announcements, and the fall in sterling, and act accordingly,” he said.
“The MPC will not hesitate to change interest rates as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit.”