Kwasi Kwarteng declines to comment as pound hits all-time low against US dollar
The Bank of England is expected to give a statement on the sterling’s slump
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Sterling plummeted to its lowest level against the dollar in history on Monday morning, dropping more than 4 per cent, as the markets responded nervously to the announcement of Britain’s “mini budget,” which has ushered in the nation’s biggest tax cuts in 50 years.
Mr Kwarteng was accused of “fanning the flames” of the tumbling pound by hinting at fresh “unfunded” tax cuts over the weekend, while campaigners and charities accused the government of “gambling with the economy.
While walking to his office in London this morning, the chancellor was asked by a reporter: “What are you going to do about the turmoil in the markets?” The chancellor replied that he would not comment now, before being questioned on what conversations he’d had with the Bank of England - but did not respond.
He was then asked if he had “anything to say” about what was going on in the markets and if was going to reverse his announcement on Friday to which he remained silent, but told the reporter he was on his way to his office.
It comes as the Bank of England is expected to make an emergency statement this afternoon on the sterling’s drop which is reported to reach parity with the dollar this year.
Work and pensions secretary Chloe Smith also declined to comment on the slump when questioned this morning.
Asked by Sky News about the slide, Ms Smith said: “I am not going to be able to comment on particular market movements and there are various factors that always go into those.
“But the government is absolutely focused on delivering the growth package as we set out, with various ways that we will be helping both businesses and households to move ahead to growth, and, as I say, to greater opportunity.”
Neither Mr Kwarteng nor prime minister Liz Truss are currently expected to publicly address the major market shift, with the PM’s official spokesman telling reporters on Monday that Downing Street would not be commenting on market fluctuations.
He said: “I think that the chancellor has made clear that he doesn’t comment on the movements around the market, and that goes the same for the prime minister.
“The growth plan, as you know, includes fundamental supply side reforms to deliver higher and sustainable growth for the long term, and that is our focus.”
Labour’s Rachel Reeves said on Monday she was “extremely worried” about the latest slump in the pound. She said Ms Truss and Mr Kwarteng were “behaving like two gamblers in a casino chasing a losing run”.
The Labour frontbencher said the chancellor had been “fanning the flames” of the pound’s decline by talking up more tax cuts. “The chancellor instead of doubling down on his position on Friday needs to now set out credible plans,” she told BBC Radio 4’s Today programme.
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