In his opening big address on Tuesday, Britain’s new finance minister Nadhim Zahawi is expected to emphasise the importance of maintaining strong public finances while avoiding further escalating inflation through increasing demand.
Zahawi will speak at the City of London’s annual Mansion House dinner. He plans to confirm that financial regulations inherited from the European Union, such as Solvency II insurance rules, will be revised after Brexit.
However, speech excerpts released in advance of the event indicate that combating inflation is a primary focus in addition to fostering longer-term growth.
In order to prevent further demand growth and to assist consumers in coping with the greatest price increases in more than a decade, he said in his speech, ‘that means delivering stable public finances.’
The address continued, ‘The nation should have faith that we can and will bring inflation under control.’
Consumer price inflation reached a 40-year high of 9.1% in May, and according to the Bank of England, it will surpass 11% in October when regulated residential energy costs are expected to increase by 40%.
In contrast to other of the candidates vying for the Conservative leadership position to succeed Prime Minister Boris Johnson, Zahawi’s position on public finances is more conservative.
Liz Truss, the foreign secretary, has stated her desire to overturn the more than 30 billion pounds ($36 billion) in tax increases planned by Rishi Sunak, a rival for the leadership position whose resignation as finance minister two weeks ago contributed to Johnson’s demise.
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