Kwasi Kwarteng endured a painful Westminster walk of shame as the chancellor dodged questions about the plunging pound following his mini-budget.
The Tory minister only offered a “no comment” on Monday as a journalist followed him for his reaction to the “turmoil on the markets”, with sterling briefly dipping to an all-time low against the dollar on Monday morning.
An adverse reaction to his £45 billion package of tax cuts set out on Friday, as well as the strength of the dollar, forced the Bank of England on Monday to issue a statement saying it “will not hesitate” to raise interest rates to prop up the value of sterling.
The markets have reacted negatively since Kwarteng announced his and prime minister Liz Truss’s plan for the economy.
Former Labour chief secretary Ed Balls led the online reaction to Kwarteng evading questions, suggesting that “next time use the government car”.
Kwarteng later announced he would bring forward an announcement of a “medium-term fiscal plan” to start bringing down debt levels.
The Treasury said it would now be published on November 23, having previously been slated for the new year, and will include further details on the government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium term.
At the same time the Office for Budget Responsibility will publish its updated forecasts for the current calendar amid widespread criticism that there was no update when Kwarteng set out his “plan for growth” last week.
But the jitters continued to spread – and the impact of the crash looked like it was starting to affect people’s everyday lives.
Banks and building societies are withdrawing some of their mortgages from sale.
Three lenders – Halifax, Virgin Money and Skipton Building Society – have so far withdrawn some of their products amid the uncertainty, according to reports.
A total drubbing of the pound on Monday even raised the prospect of an emergency rate hike from the Bank. However, in the end, governor Andrew Bailey merely released a short statement.
In it he said that the Bank would change interest rates “by as much as needed” to get inflation back to its 2% target.
Consumer Prices Index inflation is currently hovering at around 10%, and is expected to peak higher later this year.
