Kwarteng confirms further cuts of up to £18bn for public services

Budgets will not be topped up to take account of soaring inflation, chancellor says

Creaking public services must find further real-terms cuts of up to £18bn a year, Kwasi Kwarteng has confirmed – just minutes after his humiliating U-turn on the 45p tax rate.

Budgets will not be topped up to take account of soaring inflation, the chancellor said, a move described by economic experts as likely to have an “extraordinary” impact on the NHS and schools.

Mr Kwarteng argued it was right to stick within spending allocations made in 2021 – although inflation is now more than twice the forecast peak of 4 per cent made then.