Chancellor Kwasi Kwarteng must do more to reassure markets about his plans for the economy after the fall of the pound, a senior adviser to Liz Truss has said.
Gerard Lyons, an outside adviser to the prime minister, told Bloomberg: “He needs to reiterate that the tax cuts are only part of the story, not the whole story. What they are pursuing is a supply-side agenda.”
However, Lyons said the UK government must not make a “U-turn”, adding that it was also up to the Bank of England to take action.
He said: “It’s not just down to the chancellor, it’s down to the central bank to try to get ahead of the curve, to try to address the market’s concern. We need to get away from cheap money.”
Lyons, who is also chief economic strategist at online wealth manager Netweealth, said the chancellor’s tax package had targeted a domestic and business audience but had not done enough to calm investors.
“Markets were still not convinced that their fiscal easing was necessary, non-inflationary and affordable. It is clear from the market reaction that these concerns were not fully addressed.”