Kwasi Kwarteng U-turns on U-turn over date of fiscal plan

Government economic policy was today plunged deeper into chaos after Liz Truss and Kwasi Kwarteng U-turned on a plan to calm markets by bringing forward a crucial statement by the chancellor.

The media was briefed late on Monday that Kwarteng’s medium-term fiscal plan would take place earlier than the planned date of 23 November, after warnings from MPs that the seven-week delay would fuel market jitters and could lead to a higher rise in interest rates.

Markets rose and the pound hit a two-week high on the back of a report in the Financial Times that the statement – and the Office for Budget Responsibility’s judgement on the impact of his measures – would instead take place in October, ahead of the 3 November meeting of the Bank of England’s rate-setting committee.

But Tuesday saw a change of heart, with both Truss and Kwarteng taking to the airwaves to recommit themselves to the original date.

Mr Kwarteng sparked fresh confusion by telling GB News: “It’s going to be 23 November.”

He suggested that the media had overinterpreted a comment in his keynote speech to the Conservative conference in Birmingham on Monday, in which he said the statement would come “shortly”.

“Shortly is the 23rd,” he said, suggesting reporters had been “reading the runes” incorrectly.

And Ms Truss told the same channel: “We’ve got the date of November 23. This is when we’re going to set out the OBR forecasts but also our medium-term fiscal plan.”

Earlier in the day, there had been suggestions that any change of date could not be officially confirmed in public, as protocol requires it to be announced to parliament first.

But The Independent now understands that the PM and chancellor had a change of mind over the course of Tuesday, though it is not yet clear what factors played a part in the return to the original date.

The chair of the Commons Treasury Committee, Mel Stride, had welcomed the move to a date in October, which he said could persuade the Bank’s Monetary Policy Committee to shave a fraction off any hike in interest rates next month, potentially saving millions of homeowners hundreds of pounds from their monthly mortgage payments.

Mr Kwarteng’s medium-term plan is expected to include details of how the chancellor plans to bring borrowing back under control following the announcement of a two-year support package for energy bills (expected to cost £60bn over its first six months) and a £43bn tax-giveaway mini-Budget.

Crucially, the OBR report will include the official forecaster’s judgement on whether the plans – expected to include a freeze on public service spending, despite sharp inflation – will get debt falling as a proportion of GDP within three years.

Any longer timetable is likely to further undermine the government’s credibility on fiscal discipline.

Sterling edged above 1.14 US dollars on Tuesday morning in the wake of indications that the eagerly anticipated statement was being brought forward.