A Treasury minister has denied the government’s mini-budget has caused an economic meltdown, as a senior figure in government finally spoke publicly about the market turmoil.
With prime minister Liz Truss and chancellor Kwasi Kwarteng silent on the tumbling pound and interest rate fears in recent days, financial secretary Andrew Griffith was presented to the media to answer questions on their behalf.
It came as the Bank of England has launched an emergency UK government bond-buying programme to prevent borrowing costs from spiralling out of control, and followed the International Monetary Fund urging the UK to reverse a massive £45 billion tax cut funded by government borrowing.
On Wednesday, Griffith was asked by Ed Conway of Sky News if the government took responsibility for “the storm in the financial markets” since last Friday’s “fiscal event”.
In response, Griffith said: “No, we both know we’re seeing the same impact of Putin’s war cascading through things like the cost of energy, some of the supply side implications of that. And that’s impacting every major economy. Every major economy you are seeing interest rates going up as well. Every major economy is dealing with exactly these same issues.”
Griffith welcomed the “timely” intervention by the Bank of England in the markets, adding: “What the chancellor and I are focused on is delivering that economic growth plan.”
While the Tories are denying a self-inflicted wound, some are happy to blame others.
Tory peer Daniel Hannan was mocked after he blamed the economic on the prospect of Keir Starmer becoming prime minister.
He said a Labour victory at the next election would lead to “higher taxes, higher spending, and a weaker economy”.
Meanwhile Andrew Lilico, a right-wing economist supportive of the tax cuts, hit out at the IMF as a “left-wing body” after its rare criticism of a developed country as the lender of last resort highlighted the negative impact of the tax cuts.
The scale of the crisis in the markets has led to unease in some quarters of the Tory party, while Labour has joined calls for parliament, currently on a conference recess, to be recalled.
“The government has clearly lost control of the economy,” Keir Starmer told reporters in Liverpool.