Prime Minister Liz Truss defends Chancellor Kwasi Kwarteng's mini-budget on BBC Radio Leeds

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Liz Truss has defended Chancellor Kwasi Kwarteng's mini-budget saying "urgent action" was needed to protect the country from rising energy bills and to get the economy growing.

In her first public comments since Mr Kwarteng's statement plunged the financial markets into turmoil, the Prime Minister told BBC Radio Leeds listeners: "We had to take urgent action to get our economy growing, get Britain moving and also deal with inflation.

"Of course that means taking controversial decision but I am prepared to do that as Prime Minister because what is important to me is that we get our economy moving, we make sure that people are able to get through this winter and we are prepared to do what it takes to make that happen."

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It comes after an economist at Leeds University said YEP readers should be “very concerned” about the falling pound, as money markets continue to react to Mr Kwarteng’s controversial budget statement.

Liz Truss. PIC: GettyLiz Truss. PIC: Getty
Liz Truss. PIC: Getty

David Spencer, a professor of Political Economy, believes people living in Leeds could be in for a grim winter following this news, and accused the Government of “letting ideology get in the way” of running the economy.

Prof Spencer said: “The pound is falling because there is a loss of confidence in UK economic policy.

"The fall in the pound reflects the folly of the mini-budget last Friday. The move to raise borrowing to fund tax cuts isn't seen as credible with the result that the pound has plummeted.”

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Following Mr Kwarteng’s announcement last Friday, the value of the pound against the US dollar fell to its lowest level for 37 years.

Among the measures announced were the abolishment of stamp duty for new businesses, the opening of government land for the creation of new homes and businesses and financial relief for first time buyers.

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The basic income tax rate will be cut from 20 per cent to 19 per cent in the next financial year, and there will be more of a hard line for those receiving Universal Credit in a bid to fill the large number of vacancies the UK workforce are facing.

Mr Kwarteng also announced a repeal of corporation tax and the abolishment of bankers caps, in an effort to “reaffirm the UK’s status as a financial service centre.”

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During her appearance on BBC Radio Leeds, Ms Truss acknowledged that the measures would take time to have an effect.

She said the Chancellor was working “very, very closely” with the Governor of the Bank of England.

“We are facing very difficult economic times. We are facing that on a global level,” she said.

“Of course lots of measures we have announced won’t happen overnight. We won’t see growth come through overnight.

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“What is important is that we are putting this country on a better trajectory for the long term.”

On Wednesday, the Bank of England launched an emergency government bond-buying programme to prevent borrowing costs from spiralling out of control.

The FTSE 100 Index has also been hit by marked volatility amid the bond sell-off and wider global recession fears.