LONDON, Oct 12 (Reuters) – Britain does not need an early national election, Prime Minister Liz Truss said on Wednesday, dismissing calls from opposition lawmakers for a new vote after her economic plans caused market chaos.
“The last thing we need is a general election,” Truss, who took office last month, told parliament.
She added that she would not cut public spending after her government came under pressure to fund vast tax cuts that have roiled markets and sparked alarm over government finances.
The Institute of Fiscal Studies (IFS) said this week that the government needed to find of spending cuts or tax rises to stop the public debt growing.
Truss was asked at her weekly parliamentary questions if she was still committed to a pledge she made during the Conservative Party leadership contest that she was not planning public spending cuts. “Absolutely, absolutely,” she said.
“What we will make sure is that over the medium term the debt is falling, but we will do that not by cutting public spending but by making sure we spend public money well,” she said.
British markets have been in turmoil and the Bank of England has had to intervene in the gilt market in the wake of Truss’ fiscal plan for more than 40 billion pounds of tax cuts, to stimulate the economy.
Truss and finance minister Kwasi Kwarteng have since reversed one decision to ditch the top rate of income tax. They have also brought forward a budget with details of fiscal forecasts to Oct. 31.
