Kwasi Kwarteng’s decision to publish his debt-cutting plan a month earlier than scheduled has led to predictions that November’s interest rate rise could be smaller than expected.
The Chancellor had been slammed for expecting markets to wait until November 23rd, a full seven weeks away, for details.
The change is part of an ongoing attempt by the Government to reassure financial markets, which have been rattled by Kwarteng’s package of tax cuts.
It now appears that a new date will be confirmed by Number 11 today and is the second U-turn following yesterday’s volte-face on the 45p rate tax.
Prior to the rescheduling Bank of England chief economist Huw Pill had previously indicated that there could be a ‘significant’ hike.
In addition money markets have been pricing in a rise of at least 1%.
But Treasury Committee chair and Conservative MP Mel Stride claimed the next rise could be less severe than expected.
He said: “Provided the OBR forecast and new fiscal targets provide reassurance then bringing these forward should calm markets more quickly and reduce the upward pressure on interest rates to the benefit of millions of people up and down the country.
“In particular getting the forecast out ahead of the MPC meeting on 3rd November might help to reassure our rate setters that they can go with a smaller base rate increase than would otherwise be the case.”
