Government Financial Statements Deferred to November 17

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Chancellor Jeremy Hunt announced this morning that the government’s proposed financial report for October 31 has been pushed back 2 weeks to November 17.

With the pound rallying in foreign exchange markets and the lower cost of long-term government securities, the government now has more leeway with financial markets than it did in mid-October.

Financial markets did not react negatively to this morning’s delay, with the pound even appreciating against the dollar at midday. This is something that would have been highly unlikely two weeks ago, suggesting that financial markets are reassured by the tax and spending noises they are now hearing from the new government.

The two-and-a-half-week delay will give the Chancellor and Prime Minister more time to perfect the measures they will need to include in the statement as they seek to tackle an annual public finance deficit of around £35billion. sterling.

With the decline in the wholesale price of energy and the decline in the medium-term cost of public borrowing, the government undoubtedly hopes that the fiscal challenge will have eased further by mid-November.

The postponement will also prevent the financial statement from being held on Halloween, the traditional day of horrors, which would not necessarily have worked well in terms of optics for the Conservative Party.

Speaking to reporters in Westminster this lunchtime, the Prime Minister’s spokesman reiterated that the government remained committed to its manifesto promise for the 2019 general election, but would not be fired at the extent to which this was linked to every policy measure it contains.

Alongside fundamental tax decisions, including corporate tax, the government faces a number of tough spending decisions. These include increasing Universal Credit in line with inflation, continuing the current hospital building program, devoting 0.7% of GDP to international trade and maintaining the triple lock by which the regime state pension increases with inflation.

The government’s financial statements will now take place after the next meeting of the Bank of England’s monetary policy committee on November 3. The delay means the Bank will have to set interest rates next week without knowing the government’s tax and spending plans.

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