UK Truss: I recognize there has been market disruption

LONDON, Sept 30 (Reuters) – British Prime Minister Liz Truss said on Friday she acknowledged there had been turmoil in financial markets following the government’s so-called mini budget and that there It was important that monetary and fiscal policies be coordinated.

Truss has so far argued that market turmoil following the announcement of planned tax cuts a week ago is the result of global issues caused by Russia’s invasion of Ukraine, and that it is would stick to his plan to try to stimulate growth.

Bank of England chief economist Huw Pill said on Thursday there was “undoubtedly” a UK-specific component to the adverse market moves.

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“We are working very closely with the Bank of England. It is very important that monetary and fiscal policy is coordinated and I recognize that there have been disruptions,” Truss told reporters during a visit to the city. East of England on Friday when asked if she would accept that it was largely a crisis of her own making.

“It was really, really important that we were able to help families as soon as possible,” she added, citing the government’s support program to help people and businesses struggling with rising energy bills.

The government’s plans were, exceptionally, not accompanied by forecasts from the Office for Budget Responsibility (OBR), the UK’s independent budget watchdog.

A resulting sell-off led the Bank of England to step in with emergency bond purchases to protect pension funds from a partial collapse.

Truss and his finance minister, Kwasi Kwarteng, met with the OBR on Friday and said they were sticking to a November 23 date for another budget statement, when they will release the OBR’s forecast.

The OBR said it had offered to produce an analysis for Kwarteng’s September 23 tax cut plan, but had not been commissioned to do so.

Asked if it had been a mistake not to publish a forecast, Truss said: “It was important that we acted quickly, in this time frame there could not be a full OBR forecast but we did. commit to respecting the OBR forecasts.”

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Reporting by Kylie MacLellan; Editing by Alex Richardson

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