UK’s Kwarteng says he is ‘confident’ in his fiscal plan

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Chancellor of the Exchequer Kwasi Kwarteng vowed to stay the course on his economic strategy in the face of a market selloff that sent the pound to a record low against the dollar.

“I’m confident that with our growth plan and the upcoming medium-term fiscal plan -- with close cooperation with the bank -- our approach will work,” Kwarteng told a meeting of leading financiers on Tuesday, according to a readout from the Treasury. “We are committed to fiscal discipline.”

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The chancellor’s remarks show how the UK government is continuing efforts to reassure investors after twin statements from the Treasury and Bank of England initially failed to arrest the market turmoil that followed on from Kwarteng’s fiscal statement on Friday, the biggest tax giveaway in half a century.

However, UK assets showed signs of stabilizing on Tuesday, with the pound headed for its biggest rally in months and UK bonds recovering ground after the historic selloff.

Kwarteng also told the meeting that he will set out more supply-side reforms in the coming weeks and deliver on his “top priority” of liberalizing financial services. He vowed to “sort out” Solvency II rules governing insurers and make the UK’s financial regulators more “nimble.”

“We need to get the city and the UK back to where it always has been - the world’s foremost financial center,” he said. “There’s lots we can do in the financial services space to liberalize regulations that will drive economic growth.”

Attendees at the meeting included Fidelity International Chief Executive Officer Anne Richards, Legal & General Group CEO Nigel Wilson and Aviva Investors CEO Mark Versey.

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