UK preparing for budget but date and parameters unconfirmed

LONDON (Reuters) – Britain’s government has yet to confirm that a March 11 budget will go ahead on time nor whether it will adhere to existing fiscal rules, with a spokesman on Friday only willing to say that preparations for a budget were continuing.

Prime Minister Boris Johnson was forced to appoint a new finance minister on Thursday when the incumbent Sajid Javid resigned after rejecting a plan to replace his team of advisers.

In his place, Johnson appointed the relative political newcomer Rishi Sunak, a former Goldman Sachs banker, and announced the creation of a new advisory structure which will give his own office greater influence over the finance ministry.

Markets interpreted the move as a sign that higher spending could be on the way under a more pliant chancellor, with Johnson pushing for big infrastructure outlay to address economic imbalances and pay for public service upgrades.

On Friday, Johnson’s spokesman was repeatedly asked to confirm that the March 11 budget would go ahead, and whether the fiscal framework would be unchanged from that set out in the party’s 2019 election campaign.

“We will continue to have a clear fiscal framework and … that is confirmed at budget,” the spokesman told reporters. “Preparations for the budget continue at pace.”

In the December election, Johnson ditched existing rules and made new fiscal commitments: that day-to-day spending will not be funded by borrowing, that public sector net investment would not average more than 3% of GDP, and an automatic review of spending plans if debt interest payments reach 6% of revenue.

Asked directly whether the government was still committed to this framework, a source in Johnson’s office declined to comment. The source would not comment on media reports that the budget had been pushed back to allow higher spending plans and new fiscal rules to be drawn up.