Nadhim Zahawi, the new chancellor, will commit to bringing down inflation and rule out borrowing for tax cuts in his first speech since being appointed.
The Mansion House speech is being seen as a sign that he will continue with the fiscal policies of his predecessor Rishi Sunak, including a radical overhaul of post-Brexit financial regulation to ensure Britain remains “one of the most dynamic financial centres in the world”.
“The country should feel confident that we can, and we will, get inflation back under control,” he will say. “That means delivering sound public finances to avoid pushing up demand still further, providing help for households as they deal with the worst price rises in over a generation.”
Zahawi will say that reforming the EU’s Solvency II regime, which covers insurers, is an early example of the government’s new approach. Solvency II, which was introduced when the UK was part of the EU, stipulates how much capital companies should hold and where they can invest.
The chancellor will say that he wants UK insurers to have “more flexibility to invest in long-term assets like infrastructure”.
