The UK Treasury’s much-anticipated budget will be delayed beyond the October 31 deadline to ensure it “matches the new prime minister's priorities,” it was announced.
The planned economic statement to set out the next steps amid the cost-of-living crisis will now be delivered on November 17, the Treasury confirmed on Wednesday.
Upon entering 10 Downing Street on Tuesday, the new Conservative leader said the country faced a “profound economic crisis” and there were “difficult decisions to come”.
He immediately set about choosing MPs for his top team to take his agenda forward, and reappointed Jeremy Hunt as Chancellor of the Exchequer.
Mr Hunt, who scrapped almost all of Liz Truss’s economic policies, was on Monday said to be working towards the end-of-month date to have the medium-term fiscal package complete.
But earlier on Wednesday, James Cleverly, who was reappointed foreign secretary by Mr Sunak, had suggested the announcement of measures could be pushed back, given the tight time frame between the new prime minister entering office and the October 31 deadline.
“Obviously the date of that fiscal statement was originally set with no expectation of a change of prime minister,” he told BBC Breakfast. “We’ve now had a change of prime minister.
“Thankfully that’s happened very quickly, because nobody wants uncertainty.
“But the prime minister was appointed less than 24 hours ago. He is in the process of forming a government. He will want some time with his chancellor to make sure that the fiscal statement matches his priorities.”
He said while Mr Sunak and Mr Hunt “know they need to work quickly on this,” they also “want to get it right”.
When challenged over the uncertainty a delay would bring to British households struggling with the cost-of-living crisis, Mr Cleverly said “a short delay, in order to make sure that we get this right, I think that is not necessarily a bad thing at all”.
The chancellor remained tight-lipped as he headed to a Cabinet meeting on Wednesday morning, walking past reporters and photographers outside 10 Downing Street.
Mr Sunak’s entry into Britain’s highest office has given some stability to markets after weeks of upheaval caused by his predecessor’s debt-fuelled tax-slashing mini-budget unveiled on September 23.
The pound reacted calmly to Monday’s announcement that Mr Sunak had won the Tory leadership race and was set to become Britain’s third prime minister in two months.
Sterling rose again in early trading on Wednesday to reach $1.1512, the highest rate recorded since September 15 — before Ms Truss’s disastrous mini-budget.
Britain’s 10-year gilt yield declined four basis points to 3.60 per cent. The 10-year yield was at roughly 3.5 per cent before the mini-budget last month.