The new prime minister will have to decide whether to go ahead with the planned Halloween statement outlining how the government intends to get public finances back on track, Downing Street has said.
Work continues in Whitehall, led by Chancellor Jeremy Hunt, in preparation for the medium-term budget plan to be announced on October 31, as well as an updated set of economic forecasts from the Office for Budget Responsibility (OBR ).
However, a spokeswoman for No 10 said it would be up to Liz Truss’ successor to decide whether or not to continue with this approach and with the same timetable.
“Major budget decisions will rest with the next prime minister,” the spokeswoman said.
“Work is underway to prepare the medium-term budget plan. This is obviously led by the Chancellor working with the Prime Minister in the usual way.
“We are working on the preparation for the 31st, but it is obvious that the decision to proceed with this and with this timetable would be up to the new Prime Minister.”
On Monday, Mr Hunt warned of “extremely difficult” tax and spending decisions ahead as he rejected the controversial £45billion tax giveaway from his predecessor Kwasi Kwarteng.
While his announcement calmed financial markets, which had been in turmoil since Mr Kwarteng’s statement last month, he made it clear that taxes would have to rise and spending would have to be contained to fill an estimated $40 billion black hole. pounds sterling in public finances.
However, it is not clear whether the next prime minister – who has just taken office – will want to pursue his strategy.
While Rishi Sunak, who has stressed the need for financial stability, could take a broadly similar approach if he becomes prime minister, Boris Johnson has in the past taken a more expansionary approach.
However, a former deputy governor of the Bank of England has warned that whoever comes in will have to stick to Mr Hunt and his plan if he is to avoid further chaos in the markets.
Professor Sir Charlie Bean told BBC Radio 4’s The World at One: ‘Anyone who comes in pretty much has to accept whatever Jeremy Hunt has laid down for the financial statement. What you might not really have is a full reopening of issues.
“It would be even worse if the new Prime Minister decided to replace Jeremy Hunt with another chancellor. It would really create a lot of volatility in the financial markets.
“There really needs to be an acceptance from whoever takes over as Prime Minister that he will defer to Jeremy Hunt.”