Chancellor Kwasi Kwarteng has admitted to losing sleep over the markets’ reaction to his mini-Budget, as he appeared to concede he failed to anticipate the panicked response.
Mr Kwarteng also conceded that his mini-Budget had been done “at very high speed”, but said he was “100 per cent convinced that this was the right plan”.
The chancellor – who is facing calls for an inquiry into his champagne reception with hedge fund managers – suggested that he and others in government were not good at “reading” market reaction.
“It’s very difficult to actually anticipate how markets react to anything, and if politicians were really good at reading markets, I suggest they probably would be market traders,” he told the Mail on Sunday.
Mr Kwarteng added: “One of the things that really ruined my sleep is the markets. That sort of thing is trying. I’ve had difficult times reacting to what’s happening but you know, I am very confident that this is the right thing to do, and I am a really, really great believer in Britain.”
The chancellor denied that the idea that the markets would have been calmer if he had agreed to publish an independent Office for Budget Responsibility (OBR) assessment alongside his plan – arguing it was “too soon” for the forecast.
“Look, hindsight is a beautiful thing,” said Mr Kwarteng. “The whole thing was done at speed, there’s no doubt about that … So it was all done at very high speed, that’s true.”
Arguing there was now “more stability” in the markets, he added: “I am convinced the growth plan is the right thing. There is going to be controversy, markets are moving and I want to stabilise them.”
Mr Kwarteng is facing calls for an official inquiry following a report that he attended a private champagne reception with hedge fund managers who stood to gain from a collapse in sterling following his mini-budget.
The Sunday Times reported that he joined the gathering at the Chelsea home of a City financier on the evening of 23 September where he was said to have been “egged on” to commit to his plan for £45bn of unfunded tax cuts.
On Sunday 25 September, in a BBC interview, he declared there was “more to come” – a comment blamed for helping to spook the markets, driving the pound, which was already falling, to an all-time low against the dollar.
Liberal Democrat Treasury spokeswoman Sarah Olney said: “While struggling homeowners saw their mortgage bills spiral, it seems the Chancellor was sipping champagne with hedge fund managers profiting from the falling pound.”
She added: “How out of touch can you get? We need an official inquiry into this now.”
However, a source close to chancellor dismissed any suggestion of impropriety regarding his attendance at the reception.
“Any suggestion attendees had access to privileged information is total nonsense,” the source said. “The growth plan published on Friday included a commitment to review our tax code to make it simpler, better for families and more pro-growth.”
The source added: “The government’s ambitions on lowering the tax burden are hardly a state secret.”
Mr Kwarteng also attacked Labour for characterising him as not “the right sort of black person”. It follows comments by Rupa Huq MP – suspended by Labour – who said Mr Kwarteng was “superficially” black.
Meanwhile, Liz Truss has warned Tory rebels urging her to abandon her controversial tax cutting agenda that she will not change course, telling them “the status quo isn’t an option”.
She arrived in Birmingham for the start of the annual Conservative Party conference as a survey by Opinium put Labour on 46 per cent – 19 points clear of the Conservatives on 27% per cent.
But former Tory MP Nick Boles said the Conservatives had “leaped further out to the right than even Jeremy Corbyn was out to the left”, adding: “It’s where literally no voters are – that’s the extraordinary thing about it.”
Describing Ms Truss and Mr Kwarteng as “fools”, he told Times Radio: “They’ve always been fools. There is this sort of phenomenon in politics of the clever fool, which is when you’re so clever, you think you know everything, you don’t listen to anybody else.”
