Kwarteng fails to squash corporation tax U-turn speculation

Kwasi Kwarteng has done an interview from Washington which will do nothing to calm speculation about an imminent U-turn on corporation tax. The Telegraph’s Szu Ping Chan reports that:

In response to a question about how markets “have improved today because they think you’re about to do a U-turn on corporation tax”, Mr Kwarteng said: “Let’s see”. 

‘Let’s see’ is, obviously, a million miles from a denial or a reaffirmation of the current policy. If the government is going to change course on this – going back on one of the centre pieces of Liz Truss’s leadership campaign – they would be well advised not to drag this out any longer. It is hard to see how the current position can hold through the weekend let alone until 31 October.

Interestingly, Kwarteng also says that there will be  ‘no real cuts to public spending.’ Now, we know from what the Treasury said to the Guardian yesterday that by this they are not referring to inflation – as most people would – but the GDP deflator, which is at a lower level than inflation.