Pounds slips against dollar as Rishi Sunak delays Budget

Sterling still performing better than during Liz Truss’s disastrous tenure as prime minister

The pound has slipped back slightly against the dollar after chancellor Jeremy Hunt announced the planned Halloween budget will be pushed back to 17 November.

The cost of government borrowing also rose marginally after the U-turn on the statement, which Rishi Sunak said involves “difficult decisions” that he hopes will stabilise the UK’s “economic crisis”

Sterling rose sharply against the dollar at the start of trading in London but saw this ease back slightly after the delay was announced. Nevertheless, the pound remains 0.84 per cent higher at $1.156 against the US dollar for the day.

Meanwhile, yields on UK government bonds, called gilts, increased slightly. Yields on 30-year gilts, which increase as prices fall, moved 0.1 percentage points higher to 3.76 per cent.

Mr Hunt, who kept his job as chancellor following Mr Sunak’s cabinet reshuffle, said the delay would ensure the Treasury watchdog, the Office for Budget Responsibility (OBR), would be able to make “the most accurate” forecasts possible.

The statement has also been upgraded to a full Autumn Statement, indicating it will underline how crucial departmental budgets will be decided, with cuts inevitable.

Mr Hunt said: “Now we have a new prime minister and the prospect of much longer-term stability for the economy and the country.

“In that context, a short two-and-a-half week delay is the best way we will make sure that it is the right decisions we take.”

The chancellor added: “The OBR also want to make sure that their forecasts are the most accurate possible and there have been a lot of changes even in the last 48 hours.

“And this is my recommendation to the prime minister, as the best way to ensure that the decisions that we take – these very, very difficult decisions – are ones that stand the test of time and give us the best chance of giving people security over the mortgages, over their jobs, over the cost-of-living concerns that everyone has.”

Fewer than half of Britons think Rishi Sunak will be a good PM – but that’s still better than his defeated rivals’ ratings, according to this chart by Statista (The Independent/Statista)

IMF boss Kristalina Georgieva said she expects Mr Sunak to steer Britain towards fiscal sustainability, adding he was right to warn the public of difficult decisions ahead.

She welcomed what she said was Mr Sunak's clarity and constructive attitude during his time as chancellor.

“The new prime minister comes with a platform that he has shaped during his days as a chancellor, and it is one of being very prudent in bringing fiscal discipline in the UK,” Ms Georgieva said.

“I listened carefully to him talking to the British people, and this is a message that should resonate across the world. These are tough times, and tough times require tough decisions.”

After Mr Sunak replaced Ms Truss as prime minister on Tuesday, the pound surged to its highest level since before his predecessor’s disastrous mini-budget. Sterling lifted 1.9 per cent higher to $1.149 against the US dollar after the former chancellor entered No 10 on Tuesday.

Meanwhile, 30-year gilt yields, which determine the interest that the government pays on some of its loans, were 0.1 percentage points lower at 3.65 per cent.