Minister insists Liz Truss's financial plan is the right one - on a day when the pound kept slumping and the Bank of England had to step in to save pension funds
Liz Truss's economic policies are the "right plan", a minister has insisted, despite the pound slumping and the Bank of England having to intervene to save pensions.They would have collapsed today without any action from the Bank of England, Sky News reported.
But Andrew Griffith, the city minister, said after that the Government still believes the Kwasi Kwarteng's big tax-cutting policies, announced on Friday, were correct. "That is what is going to allow consumers to benefit. In the meantime, we are protecting every household and every business from the biggest macro shock out there at the moment, which is the cost of energy."The pound continued to fall despite the Bank of England's intervention to buy Government debt and stop borrowing costs spiralling out of control.
While the pound hit an all-time record low of 1.03 against the US dollar on Monday, the yield on 10-year gilts - which is a proxy for the effective interest rate on public borrowing - has soared by the most in a five-year period since 1976, according to experts. "In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses."The Treasury responded by reaffirming its commitment to the Bank of England's independence and said the Government "will continue to work closely with the Bank in support of its financial stability and inflation objectives".
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