US president says UK economy turmoil was ‘predictable’ and cutting taxes for the rich ‘was a mistake’
16 October 2022, 9:27
US president Joe Biden has criticised Liz Truss’s economic plans as a “mistake” in unusually unguarded comments.
During a visit to an ice cream shop in Portland, Mr Biden told reporters: “It was predictable.. I wasn't the only one who thought it was a mistake.. the idea of cutting taxes for the super-wealthy.. at a time when...“
He was at the ice cream shop in Oregon on an unannounced stop to promote a Democratic gubernatorial candidate.
“I disagree with that policy but it's up to Britain to make that judgement, not me,” he added.
Liz Truss's economic vision has caused weeks of turmoil, and she is now understood to be at risk of a leadership coup.
New Chancellor Jeremy Hunt, brought in to replace the sacked Kwasi Kwarteng and to restore credibility to Downing Street, spent Saturday effectively trashing the mini-budget and the set of policies that brought Ms Truss to power.
Amid warnings of "difficult decisions" to come over the next two weeks, Mr Hunt and Ms Truss will meet in her Chequers residence on Sunday as tax rises and spending cuts loom on the horizon.
The Chancellor, who spent Saturday also meeting with Treasury officials, insisted that he and the Prime Minister were a "team" as he said that his priority was "growth underpinned by stability".
"The drive on growing the economy is right - it means more people can get good jobs, new businesses can thrive and we can secure world class public services. But we went too far, too fast," he said.
Earlier, he told broadcasters: "Spending will not rise by as much as people would like and all Government departments are going to have to find more efficiencies than they were planning to."
"And some taxes will not be cut as quickly as people want. Some taxes will go up. So it's going to be difficult."
As Mr Hunt begins his job of putting together a fresh budget for October 31 one possible plan, as reported in the Sunday Times, would be to delay his predecessor's aim of reducing the basic rate of income tax by a year as part of a wider package designed to calm the financial markets.
Earlier, Governor of the Bank of England Andrew Bailey said he spoke to Mr Hunt on Friday after his appointment as he warned that interest rates may have to be raised higher than initially expected to tackle inflation.
Speaking from Washington, he said the pair had a "meeting of minds" on the issue of "fiscal sustainability" as he noted the fact the Office of Budget Responsibility is now "very much back in the picture".
Questions still hang over the Government about whether it would be able to win enough support from a divided party for a series of painful decisions on tax and spending that have already prompted memories of the austerity era under David Cameron and George Osborne.
In a media blitz over the weekend, both Mr Hunt and Ms Truss tried to win over their own party and voters to the new Downing Street regime.