UK's Kwarteng: Focused on growth, not market moves

British finance minister Kwasi Kwarteng said on Sunday that he was focused on boosting longer-term growth, not on short-term market moves, when challenged over the sharp fall in sterling and bond prices following his first fiscal statement, reported Reuters.

On Friday, Kwarteng scrapped the country's top rate of income tax and cancelled a planned rise in corporate taxes - all on top of a hugely expensive plan to subsidise energy bills for households and businesses.

“As chancellor of the exchequer, I don't comment on market movements. What I am focused on is growing the economy and making sure that Britain is an attractive place to invest,” he told the BBC, defending the fiscal expansion despite the risks it fuels inflation further, added Reuters.

Key quotes

Kwarteng said it was the responsibility of the Bank of England, and its governor Andrew Bailey, to deal with inflation.

“They're tasked to deal with inflation... they don't work in isolation, and that's why I said that I will see the governor twice a week. And we share ideas, but of course, he's completely independent,” Kwarteng said.

Asked if he was worried about the level of inflation, Kwarteng said “I'm confident that the Bank is dealing with that, but also what perplexed me was the fact that you don't deal with people's rising cost of living by taking more of their money in tax.”

On different news, Reuters also reported that Keir Starmer, leader of Britain's Labour Party, on Sunday pledged to reverse the abolition of the top rate of income tax, saying tax cuts for the wealthy wouldn't create economic growth as he made a pitch for power at his party's annual conference.

Market reaction

The news seems to have a little acceptance among the GBP/USD buyers as the quote remains pressured at the lowest levels since 1985, after refreshing the multi-year bottom on Friday.

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