UK's finance minister: borrowing to be higher in the short term

·2-min read
New British Health Chancellor of the Exchequer Kwasi Kwarteng steps outside Number 10 Downing Street in London

LONDON (Reuters) -Britain's new finance minister Kwasi Kwarteng told bankers and investors on Wednesday that the government would need to borrow more than planned to support households and businesses through the energy crisis.

In his first public move since being appointed by Prime Minister Liz Truss on Tuesday, he met senior banking figures from the City of London to set out the government's new economic approach.

"Due to the scale of the gas crisis, the government's first priority will be to support families and businesses in the immediate term," Britain's finance ministry said in a statement summarising Kwarteng's meeting.

"The chancellor was clear this will mean necessary higher borrowing in the short-term whilst ensuring monetary stability and fiscal discipline over the medium term," the statement said.

Kwarteng was committed to ensuring the economy grew faster than the public-sector debt levels and to keeping debt as a share of economic output on a downward path, it added.

Kwarteng used the meeting to give his full support for the independent Bank of England and its mission to control inflation, which is central to tacking cost of living challenges.

"We face extraordinary economic challenges in the coming weeks and months and I know that families and businesses across the UK are worried," Kwarteng said in the statement.

"The prime minister and I are committed to taking decisive action to help the British people now, while pursuing an unashamedly pro-growth agenda," he added.

This approach would focus on boosting business investment rather than redistributing wealth, he said.

Truss told parliament in her first appearance as prime minister on Wednesday that she rejected windfall taxes on the large profits being made by some energy companies.

(Reporting by William James, writing by Muvija M and William Schomberg; editing by David Milliken and Alex Richardson)