Jeremy Hunt, the fourth UK chancellor in four months, marked his first full working day in office with an astounding move to scrap almost all of the measures outlined in Kwasi Kwarteng’s catastrophic mini-budget.
Hunt’s first – and primary – job as chancellor was to calm markets and early signs from GBP/USD and UK gilts were he was enjoying a notably more successful reaction than his predecessor.
In a thumbs up from the markets, GBP/USD rose 0.8% to 1.1272 and UK 10-year gilt yields fell below 4% to 3.97%.
The chancellor said his measures were designed to bring ‘confidence and stability’ and reiterated the word stability numerous times in his speech.
Hunt tore up all tax measures announced in September apart from the changes to stamp duty and reversal of national insurance increases made under Johnson’s leadership.
There was also amendments to energy bill support with the current measures now set to end in April. In total, Hunt’s announcement would save £32 billion.
“Perhaps the largest news is the earlier cut off to the energy price cap to April next year. This is a significant development both financially and politically,” said Joshua Raymond, Director at online investment platform XTB.com.
“Financially, the energy price cap is one of the largest contributions to the black hole in the fiscal budget and gives the government more headroom for tighter fiscal cuts especially should a global recession force energy prices lower than expected in the medium term.”