Rishi Sunak and Jeremy Hunt today postponed a key financial announcement due to take place on Halloween to give them more time to ‘get under the bonnet’ of the nation’s broken finances.
The fiscal statement due to be held on October 31 will now be held on November 17, they told the new look Cabinet this morning.
It came as the new Prime Minister prepared for his first face-off with Labour’s Keir Starmer at Prime Minister’s Questions.
The statement was originally set for November 23 by former chancellor Kwasi Kwarteng, but he was forced to bring it forward amid economic turmoil created by last month’s mini-Budget.
The markets have been calmed by the replacement of Mr Kwarteng and Liz Truss in the top jobs, potentially giving the new team more time to play with.
But they are facing a serious task of how to find savings to fill in a black hole in the public coffers of up to £40billion.
Mr Hunt said today that he had discussed the plan last night with the Bank of England, after Kwarteng left Andrew Bailey out of the loop.
Mr Hunt told broadcasters: ‘I want to confirm that it will demonstrate debt falling over the medium term which is really important for people to understand.
‘But it’s also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances.
‘And for that reason the Prime Minister and I have decided it is prudent to make that statement on November 17 when it will be upgraded to a full autumn statement.’
In a statement, a No10 spokeswoman said: ‘The Prime Minister and the Chancellor agreed that the fiscal event would now take place on the November 17, and would be an Autumn Statement.
‘He (the chancellor) said it is important to reach the right decisions and there is time for those decisions to be confirmed with Cabinet.
‘The Autumn Statement will set out how we will put public finances on a sustainable footing and get debt falling in the medium term and will be accompanied by a full forecast from the Office for Budget Responsibility.
It came as the head of the International Monetary Fund backed Mr Sunak to steer Britain towards fiscal sustainability.
Kristalina Georgieva said today he was right to warn the public of difficult decisions ahead and welcomed what she said was Sunak’s clarity and constructive attitude that she knew from his time as finance minister.
She expects to speak to the recently appointed finance minister Jeremy Hunt in coming days.
‘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,’ she said in Berlin.
‘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.’
Liberal Democrat Treasury spokeswoman Sarah Olney said: ‘This delay risks leaving mortgage borrowers, pensioners and struggling families under a damaging cloud of uncertainty.
‘Rishi Sunak must confirm now that benefits and pensions will be up-rated in line with inflation, and there will be no cuts to our NHS and other crucial public services.’
Foreign Secretary James Cleverly had earlier hinted this morning that a delay could occur. He told BBC Breakfast: ‘Obviously the date of that fiscal statement was originally set with no expectation of a change of prime minister. We’ve now had a change of prime minister.
‘Thankfully that’s happened very quickly, because nobody wants uncertainty.
‘But the Prime Minister was appointed less than 24 hours ago. He is in the process of forming a Government. He will want some time with his Chancellor to make sure that the fiscal statement matches his priorities.
‘Now, I don’t know whether that means that date is going to slip but, as you suggested, the current date is only a couple of days away.
‘The Prime Minister and the Chancellor know they need to work quickly on this but they also want to get it right, so we’ll see what happens to that date.’
When it was put to him that a delay would bring more uncertainty, Mr Cleverly said that ‘a short delay, in order to make sure that we get this right, I think that is not necessarily a bad thing at all’.
Last night the new PM plunged the knife in on Liz Truss with a pledge to ‘fix’ her ‘mistakes’ and win back the public’s ‘trust’.
The incoming premier addressed the nation from Downing Street after being asked to form a government by King Charles in the traditional ‘kissing hands’ ceremony at Buckingham Palace.
In a sombre speech, he warned of ‘difficult’ decisions to deal with the ‘profound economic crisis’ facing the country, saying he ‘understood’ that Britons were suffering. Rebutting jibes that he is too wealthy to identify with the struggles of ordinary people, he said: ‘I fully understand how hard things are.’
In a swipe at Boris Johnson, who dramatically pulled out of the Tory leadership battle on Sunday night, Mr Sunak said the ‘mandate’ from the 2019 election did not belong to any individual. He also stressed his government will have ‘integrity, professionalism and accountability at every level’.
Mr Sunak then embarked on a Cabinet reshuffle, with Jacob Rees-Mogg and Brandon Lewis early casualties.