Pound falls as UK budget talks fail to reassure

STORY: Britain’s independent budget watchdog walked into Downing Street on Friday (September 30).

The talks with Prime Minister Liz Truss and Finance Minister Kwasi Kwarteng come after plans for huge tax cuts sparked a market meltdown.

The measures were announced without any forecasts by the Office for Budget Responsibility - a step that would normally be expected.

In the days that followed, the pound plunged to record lows versus the dollar, and the Bank of England was forced to step in to calm fevered selling of UK government bonds.

OBR chair Richard Hughes spoke after Friday’s meeting:

''We saw the prime minister and chancellor, we talked about some economic and fiscal outlook, we're going to be providing the chancellor with an update of our forecasts next Friday and we'll set up a timetable for our forecast process next week.’’

The government has vowed not to alter the content or timing of the tax plans.

Kwarteng remains committed to giving a fiscal statement on November 23.

On Friday, officials confirmed that the OBR’s forecasts also won’t be published until that day.

Critics, including many in the ruling Conservative party, have said markets need reassurance long before then.

Truss appears unmoved though.

She says market turbulence is more down to Russia’s invasion of Ukraine, and says her plan will help spur economic growth.

The pound resumed falls after Friday’s meeting, however, dropping around half a percent against the dollar.