Kwarteng tells City chiefs that UK borrowing must increase to pay for energy package

Kwasi Kwarteng has today told City chiefs that short-term UK borrowing must increase to pay for a £100bn+ energy package, but that “fiscal discipline” will return soon.

The new chancellor said in a meeting with financial services executives that the government is “committed to taking decisive action to help the British people now”, but that it will pursue an “unashamedly pro-growth agenda” that will involve radical economic reforms.

Truss and Kwarteng will unveil an expected £140bn plan tomorrow to curb energy costs for households and businesses this winter.

“We face extraordinary economic challenges in the coming weeks and months and I know that families and businesses across the UK are worried,” Kwarteng said.

“The Prime Minister and I are committed to taking decisive action to help the British people now, while pursuing an unashamedly pro-growth agenda.”

Truss also spent parts of the campaign calling for the Bank’s mandate to be changed in the wake of claims from her camp that its £450bn Covid Quantitative Easing programme fuelled inflation.

Her supporters have also said Truss is in favour of new rules that will allow ministers to overrule regulatory decisions on financial services made by the Bank of England.

These comments had worried Bank chiefs about the Old Lady’s independence from government.

However, Kwarteng today tried to assure the City chiefs that Truss was in support of the central bank’s independence.

A spokesperson for the Kwarteng said: “The chancellor also reiterated his full support for the independent Bank of England and their mission to control inflation, which is central to tacking cost of living challenges.”

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