(Bloomberg) --

Executives at some of the City of London’s biggest firms have told Chancellor Kwasi Kwarteng that he can’t wait until his November budget to reassure markets about his fiscal plans.

At a Wednesday meeting -- part of a series of roundtables to discuss Kwarteng’s mooted growth plan -- executives told British officials that markets need to hear about how the government intends to pay for the package of spending and tax cuts outlined on Friday, according to people familiar with the details. Regular updates from the Treasury are needed given the severity of the market reaction.

Kwarteng had sought their advice on how to calm the market turmoil that led to the pound to hit a record low and to gilt yields spiking after the poorly received announcement, which saw the Bank of England intervening Wednesday and pledging unlimited purchases of long-dated bonds. 

Representatives for the banks and a spokesperson for the Treasury declined to comment.

Read More: BOE Pledges Unlimited Bond-Buying to Avert Imminent Gilts Crash

Firms including Bank of America Corp., Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co. were among those at the Wednesday morning meeting with Kwarteng, according to a readout from the Treasury. At the meeting, the chancellor underlined the government’s “clear commitment to fiscal discipline,” the readout said.

Kwarteng is currently scheduled to give the full outline of his plans on November 23. But he was told minimal communication during that eight-week gap would risk further turmoil, according to the people, who asked not to be identified talking about a private meeting. Instead, attendees said more regular updates with the markets could help stabilize the situation.

Informal Soundings

Advisers to Kwarteng have already taken informal soundings from City of London financiers as officials attempt to understand the sharp selloff in sterling assets caused by the fiscal statement that promised tens of billions of pounds in tax cuts on top of a pledge to freeze energy costs over the winter, according to people with knowledge of the talks.

Officials have been attempting to explain the government’s policy and have asked several institutions for their views how they can rebuild their credibility with investors, one of the people said. Financiers were told the government believed the UK’s relatively low debt-to-GDP ratio had meant the increase in borrowing outlined by Kwarteng last Friday would not cause undue alarm among buyers of gilts, according to the person.

Kwarteng was warned at a previous meeting of City bosses weeks before the so called mini-budget to be wary about the dangers of stagflation and the risk of implementing measures that could make the pound trade like an emerging markets currency.

At the gathering, which took place on September 7, Kwarteng had warm words about his vision for Big Bang 2 reforms to boost the City of London and spoke of potential cuts in corporation tax, according to one person briefed on the discussions. That was welcomed, but sparked caution from some present about the impact on markets.

©2022 Bloomberg L.P.