LONDON (Reuters) – British Finance Minister Kwasi Kwarteng said on Sunday his focus was on promoting long-term growth rather than short-term market movements as he took office for the first time Faced with the challenge of sharp declines in sterling and bond prices. Financial Statements.
Kwarteng has scrapped the country’s top income tax rate and scrapped plans to raise corporate taxes — all on top of a huge scheme to subsidize energy bills for households and businesses.
Sterling fell more than 3% against the dollar to its lowest since 1985 on Friday and was also weaker against the euro and yen, while government bonds posted their biggest one-day drop
On Sunday, Kwarteng defended the measures, saying they support the economy in the face of the once-in-a-lifetime shock of the COVID-19 pandemic and the aftermath of Russia’s invasion of Ukraine Energy prices rose.
“As Chancellor of the Exchequer, I don’t comment on market movements. My focus is on growing the economy and making sure the UK is an attractive place to invest,” he told the BBC, defending fiscal expansion, although It risks fuelling inflation further.
“There is no way the government…should not respond with a fiscal expansion to support the economy and support our people through these two unprecedented shocks.”
Kwarteng said it was the responsibility of the Bank of England and its Governor Andrew Bailey to fight inflation.
The Bank of England raised interest rates by 0.5 percentage points to 2.25% on Thursday, the day before Kwarteng announced its package.
“Their job is to deal with inflation…they don’t work in isolation, that’s why I say I meet with the governor twice a week. We Shares ideas, but of course, he’s completely independent,” Kwarteng said.
When asked if he was worried about inflation levels, Kwarteng said “I believe the banks are dealing with that, but what confuses me is that you don’t get it by spending more money on Taxes to deal with people’s rising cost of living.”