Nadhim Zahawi, the new chancellor, will on Tuesday commit to bringing down inflation and rule out borrowing for tax cuts, in a sign that he will continue with the fiscal policies of his predecessor Rishi Sunak.
In his first speech since being appointed, Zahawi will also endorse Sunak’s plan for a radical overhaul of post-Brexit financial regulation to ensure Britain remains “one of the most dynamic financial centres in the world”.
Sunak quit earlier this month in protest at outgoing prime minister Boris Johnson’s leadership style and over differences on economic policy, particularly over Johnson’s insistence on tax cuts.
Zahawi was swiftly drafted in to replace Sunak, but the new chancellor will insist in his Mansion House speech in the City of London that tackling inflation remains a core priority for the government.
“The country should feel confident that we can, and we will, get inflation back under control,” he will say.
“That means delivering sound public finances to avoid pushing up demand still further, providing help for households as they deal with the worst price rises in over a generation.”
Zahawi’s tenure as chancellor could be shortlived; a new prime minister will be in place by September 5 and is likely to appoint their own choice as chancellor.
In the interim period, Zahawi’s Mansion House speech will indicate that Sunak’s policies will continue, not just in tackling inflation but also on overhauling regulation of the City.
Read what Zahawi will say here.