NEW Chancellor Jeremy Hunt yesterday warned of more tax rises and deep spending cuts as he scrambled to save the economy.
And in a further blow, the Bank of England warned interest rates would go up — pushing mortgage rates even higher.
New Chancellor Jeremy Hunt warns of more tax hikes and deep spending cuts
The grim news comes as PM Liz Truss rips up her entire economic manifesto after it panicked markets.
Mr Hunt may delay the 1p cut to income tax, due for April, in another mini-Budget U-turn. Putting it back will save about £6billion.
But No11 insiders said it would not help balance the books in the long run. Ministers are eyeing other measures and a Treasury source said: “Everything is on the table.”
It came as Mr Hunt warned of “very difficult decisions ahead”.
All departments including the NHS and Ministry of Defence will have to make efficiency savings as he tries to plug a £40billion hole in the finances.
Mr Hunt added: “Spending will not rise by as much as people would like… and some taxes will not be cut as quickly as people want. Some taxes will go up.”
The Chancellor accused sacked predecessor Kwasi Kwarteng of “flying blind” by rushing out plans without a full economic forecast.
Meanwhile, Bank of England chief Andrew Bailey said homeowners faced more pain.
Speaking in Washington DC, he warned: “My best guess is that inflationary pressures will require a stronger response than we perhaps thought in August.”
He said that inflation was expected to run high well into 2024.
Mr Bailey revealed he had “an immediate meeting of minds on the importance of stability and sustainability” during talks with Mr Hunt.
Labour leader Sir Keir Starmer pointed to the “grotesque chaos of a Tory PM handing out redundancy notices to her own chancellor”.
The quote echoed Neil Kinnock’s attack on the hard-left in 1985.
Sir Keir said: “I’m really worried about people not on a fixed-term mortgage.
“They’re going to face two, three, four hundred pounds more a month because of the kamikaze budget that this Prime Minister put in.”
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