Canada markets closed
  • S&P/TSX

    +107.96 (+0.56%)
  • S&P 500

    -10.56 (-0.25%)
  • DOW

    -54.34 (-0.16%)

    -0.0001 (-0.02%)

    -0.01 (-0.02%)

    -3,637.13 (-6.51%)
  • CMC Crypto 200

    -2.91 (-0.24%)

    -0.10 (-0.01%)
  • RUSSELL 2000

    +2.49 (+0.11%)
  • 10-Yr Bond

    +0.0050 (+0.31%)
  • NASDAQ futures

    -3.75 (-0.03%)

    +0.91 (+4.84%)
  • FTSE

    -10.76 (-0.15%)
  • NIKKEI 225

    -259.67 (-0.92%)

    0.0000 (0.00%)

Uncertainty over UK budget date as Johnson tightens grip on Treasury

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Tom Belger
·Finance and policy reporter
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Newly installed Chancellor of the Exchequer Rishi Sunak leaving Downing Street, London, as Prime Minister Boris Johnson reshuffles his Cabinet.
Newly installed chancellor Rishi Sunak. (PA)

The shock departure of Sajid Javid as UK chancellor has cast fresh uncertainty over Britain’s economic policy, with growing questions over the timing and direction of the next budget.

The promotion of Rishi Sunak to the job comes just weeks before his predecessor was due to unveil the government’s tax and spending plans in the UK budget next month.

Javid warned prime minister Boris Johnson not to risk the “credibility” of the Treasury in his resignation letter after the cabinet reshuffle on Friday. He walked out after reportedly being told he could only stay on if he replaced all his advisors with candidates picked by the prime minister’s team.

The Times reported the budget could be delayed, and claimed the new chancellor was under pressure from Downing Street to loosen the government’s current tight rules to increase day-to-day public spending.

Read more: Analysts predict ‘populist’ spending boost after Javid walks

Asked whether the budget would go ahead on 11 March as planned, a source in Number 10 told news site Politico the chancellor should be allowed to “get his feet under the table.” But the source said no decision had been made.

Housing, communities and local government minister Robert Jenrick told BBC Radio 5 Live on Friday the budget would be held “next month,” but did not confirm the date. The Treasury did not respond to a request for comment.

Jenrick also denied Sunak would be a “puppet” of Johnson, but confirmed the prime minister and new chancellor would now share a team of special advisers.

The shakeup is widely seen as showing Johnson’s desire to have more control over economic policy, with one analyst calling it a “power grab.”

Read more: Who is Rishi Sunak? Profile of the new chancellor

Forrmer Conservative chancellor Norman Lamont even told BBC’s Newsnight late on Thursday the move “reeks to me slightly of vulnerability, suspicion, paranoia.”

Javid had been seen as reasonably aligned with the prime minister’s aims. But Javid himself said he was presented with terms “any self-respecting minister” could not accept.

The pound rose on Friday as it fuelled expectations Johnson will order the new chancellor to loosen the purse strings on public spending in the budget. Jenrick promised “major increases” in investment in infrastructure, a key part of Johnson’s drive to hold on to voters in the North and the Midlands since the election.

He added that Sunak had been involved in budget preparations already in his previous role as chief secretary to the Treasury. But questions remain over how far Sunak will look to assert his independence, with chancellors typically fighting off demands for cash to keep a rein on spending.

The March budget has already been delayed. It was previously due to held in February, as Johnson had vowed to hold it within 100 days of his re-election in December. A November budget statement was also cancelled when Johnson called the poll.