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  • UK assets fall after Friday’s budget statement
  • The government sticks to a “medium and long term” plan
  • Ministers mindful of inflation, says spokesman
  • Finance minister, BoE governor in touch on economy

LONDON, Sept 26 (Reuters) – The British government is not commenting on market movements and is sticking to the budget plan it presented last week, a spokesman for Prime Minister Liz Truss said on Monday, after the pound plunged to a record low against the dollar and UK bonds sank.

The massive sale of British assets followed Friday’s budget statement by Finance Minister Kwasi Kwarteng, which cut a series of taxes without specifying how it would be funded.

Kwarteng, Chancellor of the Exchequer, declined to comment on the pound’s freefall on Sunday, saying he was focused on long-term growth and not short-term market reaction.

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“The Chancellor has made it clear that he does not comment on movements in the market and the same goes for the Prime Minister,” the Truss spokesman said.

The spokesperson said there were no plans to change the stated measures, which he described as “a medium to long-term plan, which consists of fundamentally changing our approach to the economy by putting the emphasis on growth.

Kwarteng has put the Bank of England in charge of containing the inflationary effects of the massive fiscal expansion, telling Governor Andrew Bailey last week that he expects the central bank to take the strong steps needed to contain inflation.

Britain’s Prime Minister Liz Truss walks outside Downing Street in London, Britain September 23, 2022. REUTERS/Maja Smiejkowska/File Photo

Asked whether the government expected the BoE, rather than ministers, to do the heavy lifting to contain inflation, the Truss spokesman said a program to help households pay their energy bills could reduce inflation by 5 percentage points.

“It is right that we think about the best way to control inflation, and of course this is something the government is aware of,” he said, adding that any future tax cuts – discussed by Kwarteng on Sunday – believed to belong to the finance minister. out.

“It is up to the Chancellor to outline any changes or potential changes at a future tax event.”

He said it was long-standing government policy not to comment on interest rates except to say it was important the Bank of England remained independent, although Bailey was in regular contact with Kwarteng on the state of the economy.

When asked if the Finance Ministry and the BoE were working together, the spokesman said “the Chancellor made it clear that they were.”

“He speaks regularly with the Governor of the Bank of England to share his views on how best to grow the UK economy,” he said.

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Reporting by Alistair Smout and Kylie MacLellan; Editing by Toby Chopra

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