Yahoo Finance New prime minister could delay Jeremy Hunt’s 31 October budget announcement
A decision on whether to go ahead with the government’s medium-term fiscal plan on 31 October will be for the next prime minister, Downing Street has said.
"Major fiscal decisions will be for the next prime minister,” a Downing Street spokesperson said.
"We are working in preparation for the 31st. Obviously a decision for proceeding on that will be for the next prime minister," they added.
Chancellor Jeremy Hunt on Thursday pressed on with preparations to unveil a fiscal statement — which aims to fill a £40bn hole in the UK public finances — on 31 October, in spite of Liz Truss’s resignation.
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The Conservative Party will choose a new leader on 28 October, a timeline designed in part to have a new prime minister in place in time for the scheduled medium-term fiscal plan at the end of this month.
It has been suggested that a new prime minister — if elected next Friday — would not have enough time to have input into the fiscal plan just three days later.
Hunt’s program was meant to reassure markets and delays will only create more market turmoil as investors do not like uncertainty.
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"I don’t think it would be well received," James Athey, investment director at the fund manager Abrdn, told Bloomberg. "But given the U-Turn which has already occurred, I don’t think it would lead to the sort of volatility we saw at the back end of September."
Many Tory MPs, including those who do not count themselves as fans of Hunt, believe he will remain as chancellor under any new prime minister and that the economic plan will not change much.
But although this might be the case if Rishi Sunak wins, as Hunt supported his previous bid and has followed an economic path similar to what the former chancellor pitched during the leadership race, things are a bit more uncertain if someone else wins.
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Both Penny Mourdant and former PM Boris Johnson are seen as strong contenders and it would not be surprising to see them wanting to change direction of a fiscal plan of tax rises and budget cuts that will be politically unpopular.
Downing Street also said Truss would spend her last weekend at Chequers.
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