Chancellor Kwasi Kwarteng has scrapped a number of key meetings and is flying back to the 海角视频 from Washington after a significant section of his mini-budget was re-drawn amid days of open revolt among Tory MPs. It appears another U-turn is on the cards.
Liz Truss is expected to scrap parts of her mini-budget amid growing pressure on the Prime Minister to rescue her administration. According to the BBC, the Chancellor has now cancelled planned meetings in the US and is leaving a day early for 鈥渃runch talks in the 海角视频鈥 over the mini-budget.
In the early hours of Friday morning the BBC, The Times and the Financial Times began reporting that Mr Kwarteng had cancelled appointments in the USA and was flying home.
The Prime Minister鈥檚 key pledge to scrap the planned increase in corporation tax from 19% to 25% is widely seen as a likely casualty in the coming days, as Ms Truss seeks to save her embattled premiership.
It comes amid reports that senior Tories are plotting the possibility of replacing Ms Truss with a joint ticket of Rishi Sunak and Penny Mordaunt, with the Times newspaper also reporting that party grandees are considering replacing her with a 鈥渦nity candidate鈥.
Downing Street on Thursday did not deny that the potential exists for a reversal on the corporation tax policy, one of the landmark promises made by Ms Truss in her pitch to become Tory leader.
It came amid reports that talks were under way between No 10 and the Treasury on abandoning elements of the 拢43 billion tax-cutting plan.
Speculation was fuelled further when the Chancellor, in an interview with the Telegraph, only said 鈥渓et鈥檚 see鈥 when asked about the expectation from financial markets that the Government could ditch its corporation tax promise.
Friday is set to be a crunch day in the financial markets, with the Bank of England鈥檚 emergency bond-buying scheme due to come to an end.
Officials stepped in two weeks ago after the mini-budget sent markets into chaos amid concerns over higher borrowing costs, triggering concerns in particular about the fate of pension funds.
A growing expectation on Thursday of a Government U-turn on corporation tax appeared to reassure the finance industry, after Bank of England Governor Andrew Bailey spooked the markets by insisting that the emergency support would not be extended.
Mr Kwarteng also insisted to the Telegraph that there would be 鈥渘o real cuts to public spending鈥, appearing to double down on comments made in the Commons by the Prime Minister on Wednesday.
But he told the paper: 鈥淟et鈥檚 face it, there are difficult choices within that you have to prioritise.
鈥淵ou have to make sure that you know the public is getting value for money. And I make no apologies for that, there has to be some sort of fiscal discipline.鈥
In the same interview, he was insistent that his party could still be trusted with the public finances.
鈥淲e鈥檙e Conservatives. Fiscal discipline runs right through our DNA鈥, he told the paper.
The Government鈥檚 plans revolve around securing an increase in economic growth 鈥 with a target of an annual rise of around 2.5% in gross domestic product (GDP).
The crucial date will be October 31, when the forecasts presented by the Office for Budget Responsibility (OBR) alongside the Chancellor鈥檚 statement will give an assessment on whether such a plan is realistic.
Mr Kwarteng on Thursday was insisting that his position was safe, telling broadcasters in Washington: 鈥淚 am not going anywhere.鈥
It comes amid speculation in Westminster about the fate of the Chancellor, only a few weeks into the job, if his financial plans are torn up in the coming days.
Former Tory chancellor and party grandee Ken Clarke said that Ms Truss could not be able to make Mr Kwarteng a 鈥渟capegoat鈥, but it comes amid mounting anger and unrest within the Conservatives about the crisis of recent weeks.
Newly elected Foreign Affairs Committee Chair Alicia Kearns told LBC鈥檚 Tonight With Andrew Marr that she wanted the Prime Minister to succeed but added her voice to calls for a change of course on the mini-budget.
She said: 鈥淭he markets are not woke, the markets are not left. The fact they are not lefty, anti-government, the fact they have been spooked, is something that should be taken incredibly seriously.鈥
Former veterans minister Johnny Mercer also tweeted that the situation 鈥渘eeds a course correction from No.10.
鈥淕et on and do it 鈥 we all know it鈥檚 coming.鈥
But amid reports of a 鈥渃oronation鈥 of a new leader to save the Tories from a crushing defeat at the next election, some warned against such a drastic move.
One senior Tory told PA that any move to replace Ms Truss would be 鈥渃ompletely bonkers鈥 and 鈥減remature鈥, while a staunch ally of Ms Truss, Sir Christopher Chope, insisted on BBC Newsnight that she would not be forced by the 鈥渁nti-growth coalition鈥 into a humiliating retreat on corporation tax.
鈥淚f we were to increase corporation tax having said that we鈥檙e not going to, that would be totally inconsistent with the Prime Minister鈥檚 policy of promoting growth, growth and growth,鈥 he said.
