WASHINGTON - Bank of England governor Andrew Bailey said on Saturday he had a "meeting of minds" with Britain's new finance minister on the need to restore fiscal stability after a controversial budget plan caused market upheaval.

Speaking at a conference in Washington, Bailey warned against "flying blind" when setting fiscal policy but added that he and Britain's new chancellor of the exchequer, Jeremy Hunt, saw eye to eye when they spoke on Friday.

"It's not appropriate for me to constrain the choices he makes," Bailey said.

But he added that he had a "clear message for everybody, including a clear message for markets."

"I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability," he said, at the G-30 international banking seminar, during the annual meetings of the International Monetary Fund.

Prime Minister Liz Truss sacked Kwasi Kwarteng as finance minister on Friday and abandoned a key plank of their budget, pledging to raise corporation taxes after all.

Kwarteng had rushed back to London from the IMF meetings in Washington, where the crisis lender's chief had lectured him about the need for a "coherent" fiscal policy that does not undermine central bank efforts to contain inflation.

Hunt, a former foreign minister, admitted on Saturday that "mistakes" had been made, saying Kwarteng and Truss had erred in trying to cut taxes for the highest earners.

Presenting their plan without independent forecasts from the Office for Budget Responsibility, he added, amounted to "flying blind."

The Bank of England had to launch an emergency bond-buying programme to calm the markets following Kwarteng's disastrous budget.

The Bank of England and other central banks have been raising interest rates aggressively in efforts to tame runaway inflation, which has soared as energy and food prices jumped following Russia's invasion of Ukraine.

Bailey warned that the central bank may have to be even more aggressive.

"We will not hesitate to raise interest rates to meet the inflation target," he said. AFP