Nadhim Zahawi, the new chancellor, will pledge on Tuesday to lower inflation and rule out borrowing to cut taxes, a sign that he will continue the fiscal policies of his predecessor Rishi Sunak.
In his first speech since his appointment, Zahawi will also endorse Sunak’s plan for a radical overhaul of post-Brexit financial regulation to ensure Britain remains “one of the fastest growing financial centers in the world”.
Sunak resigned earlier this month to protest outgoing Prime Minister Boris Johnson’s leadership style and differences over economic policy, particularly Johnson’s insistence on tax cuts.
Zahawi was quickly drafted in to replace Sunak, but the new chancellor will insist in his speech at Mansion House in the City of London that tackling inflation remains a key priority for the government.
“The country must be convinced that we can, and we will, control inflation,” he said.
“This means ensuring sound public finances to avoid driving up demand further, helping households weather the worst price rises in more than a generation.”
Zahawi’s tenure as chancellor could be short-lived; a new prime minister will be in place by September 5 and is expected to appoint his own choice as chancellor.
In the meantime, Zahawi’s speech at Mansion House will indicate that Sunak’s policies will continue, not only in fighting inflation, but also in overhauling city regulations.
Read what Zahawi will say here.