The Bank of England may need to step in with an emergency rate hike to calm markets nervous about the government’s stimulus package, ruling Conservative MPs say. rice field. The pound fell sharply against the dollar in the foreign exchange market on the 26th, hitting new lows.
An emergency rate hike seemed more likely than ever, boding very badly for Prime Minister Truss and Finance Minister Kwartengu, lawmakers said. “The political outlook is bleak if any emergency response is launched,” said one former cabinet minister, who asked not to be named because it was an internal party matter.
Another Conservative MP said the Truss government’s proposal for a “mini-budget” had not received much support in parliament, voicing skepticism among members of parliament as well as ministers. There is also debate within the Conservative Party about vetoing economic stimulus measures, but vetoing has yet to become mainstream.
The Conservatives have a comfortable majority in parliament, but Truss actually has far less discretion. Mr. Truss won the party leadership run-off election among rank-and-file members in the summer and won the prime minister’s seat, but two-thirds of the party’s lawmakers did not support him, and among lawmakers he was in favor of him. There is widespread skepticism about the skill.
Mr. Quarteng will hold a closed-door meeting to reassure investors and is likely to meet with Bank of England Governor Andrew Bailey, according to people close to the government. He said he would not schedule an emergency meeting as it would further unnerve the market.
Original title:UK Tories Look to BOE to Halt Panic Over the Pound (1)(excerpt)