Chancellor to unveil economic plan on 31 October

Chancellor Kwasi Kwarteng will unveil his economic plan for balancing the government's finances on 31 October.

The fiscal statement is expected to detail how the Chancellor intends to pay for £43 billion of tax cuts and cut debt. An economic forecast produced by the Office for Budget Responsibility (OBR) will be published at the same time.

Mr Kwarteng had originally been scheduled to make the statement on 23 November. However, in a bid to reassure markets after his Mini Budget sparked turmoil, he has brought the date forward by almost a month.

The Chancellor’s refusal to publish a draft report by the OBR to accompany the Mini Budget on 23 September rattled the financial markets.

Concerns that Mr Kwarteng's tax plans were unaffordable prompted the pound to hit a record low against the dollar of $1.03 and the Bank of England to step in to stop pension funds from collapsing.

Mr Kwarteng recently scrapped a decision to cut the top rate of income tax.

The new date means Mr Kwarteng's fiscal statement will be published before the Bank of England announces its latest decision on interest rates on 3 November.

The financial markets will now be watching to see how Mr Kwarteng intends to manage government borrowing following the £43 billion of tax cuts announced in the Mini Budget.

This is expected to entail spending cuts for government departments. However, according to the Institute for Fiscal Studies (IFS), rising inflation means that government departments will already have to find £18 billion from existing budgets just to provide planned services.

Mr Kwarteng confirmed the 31 October date in a letter to Mel Stride, Chair of the Treasury Select Committee.

Mr Stride responded:

Having pressed so hard on this I strongly welcome decision by Kwasi Kwarteng to bring forward the OBR forecast to 31 October. If this lands well with markets then the Monetary Policy Committee (MPC) meeting on 3 November may result in smaller rise in interest rates. Critical to millions of mortgage holders.

The Chancellor’s fiscal statement will be watched with interest by many, and Mr Kwarteng will be hoping that it receives a calmer reception from the financial markets than his Mini Budget did.