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The pound Sterling gained slightly over the dollar on Monday after new UK Finance Minister Jeremy Hunt announced that he will soon roll out the medium-term fiscal plan for the country.
The decision is coming following a dramatic day in British politics on Friday. Liz Truss had to make a big fiscal u-turn by appointing Hunt as the new Finance Minister after sacking Kwasi Kwarteng.
The pound grew by 1% and could gain further value in the coming days as Prime Minister Liz Truss tries to push policies that will grow the economy.
U.K To Prioritize Economic Growth
Hunt will deliver the statement on the fiscal policy today, although it was initially scheduled for October 31.
However, the complete medium-term plan will still be published on the scheduled date. This time, the plan comes with a forecast from the independent Office for Budget Responsibility, which was conspicuously left out during the mini-budget announcement on September 23.
Hunt also noted that his priority, just like his predecessor, will be on the growth of the UK’s economy. However, the growth will be a stable process.
Initial Fiscal Steps Went Too Fast
With the focus on growing the economy, the level of unemployment will be cut down while new businesses will have the right environment to thrive. Hunt added that it was the initial plan of his predecessor, but it went too fast.
Liz Truss has been retracing the economic steps her administration took upon resuming office. The series of debt-funded tax cuts introduced in late September attracted the damning verdict of the International Monetary Fund (IMF). The international body, in a rare statement, said the fiscal plans laid out by the U.K would “likely increase inequality, adding that heavy and untargeted fiscal packages will dwindle the economy.
The decision by the U.K government had an immediate negative impact, as the pound hit a record low while the U.K. bond saw a sharp sell-off, days afterward. The backlash led to the sacking of Kwarteng, as Truss tries to minimize the impact of the damage on her administration.
“We are going to do things differently, charting a new course for growth – it remains the core mission of this government”, Truss tweeted to assure worried citizens.
Read more: https://www.economywatch.com/pound-sterling-gains-over-the-dollar-as-u-k-charts-a-new-course-on-growth