CHANCELLOR Kwasi Kwarteng has messaged Tory MPs encouraging them to “remain focused” despite market turmoil this week.
Both he and Prime Minister Liz Truss made their first public comments since the mini-budget market chaos on Thursday, insisting they will stick to their plans and arguing they “had to take urgent action”.
Their doubling down came in spite of mounting calls – including from the International Monetary Fund (IMF) – for a U-turn on some of the policies announced last week after the pound sunk to a record low of 1.03 against the US dollar on Monday.
As Truss took part in an hour’s worth of short BBC local radio interviews, the FTSE 100 Index in London fell by more than 2% at one stage following a rollercoaster ride of volatility the day prior.
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It followed the Bank of England’s announcement that it was stepping in to buy up to £65 billion worth of government bonds – known as gilts – at an “urgent pace” amid a sell-off in the gilts market, which left some UK pension funds teetering on the brink of collapse.
Sky News published a message sent by Kwarteng to his MPs on Thursday in an attempt to reassure them, and get them back on side as furious backbenchers briefed against the Government to the media. Adam Tomkins, a former Tory MSP, publicly said he hopes Labour win the next General Election.
In the message, he appears to blame the situation on “immense global market volatility” rather than accept that the market turmoil began as he presented his fiscal statement last week.
Read the full message below:
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Colleagues, thank you all for your input. I understand your concern. We are one team and need to remain focused. There is immense global market volatility – not just a UK issue – being driven by war, Covid hangover, and a super strong USD all other major currencies are wrestling with (see Japan this week; Euro down).
The path we were on was unsustainable – we couldn’t simply continue to raise taxes. However, I totally understand the need to be credible with markets. We will show markets our plan is sound, credible and will work to drive growth. That is the way that we invest in the public services that people need, create jobs and give people security and stability.
We need to remember the cost of not acting would have been higher. £6500+ energy bills next year – and more tax rises! Businesses would have closed, and families would have been unable to heat their homes. Consumer spending would have collapsed – we needed to act quickly.
We are working at pace to align our spending policy to show the markets there is a clear plan. We have the second lowest debt-to-GDP ratio in the G7. Lots of supply side reforms coming over next 6 weeks on childcare, business regs, financial services, agriculture and more. It’s v ambitious. We are removing the barriers that have slowed down the UK economy for decades.
We need your support to do this as the only people who win if we divide is the Labour Party. Thank you again. Thank you again. I am always available for a meeting. As you are aware, I have always valued colleagues’ time and ideas. I hope we can engage dynamically in the next few days and weeks. Thank you!
Kwasi
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