Kwasi Kwarteng is contending with massive market turmoil sparked by his tax-cutting mini-budget as a disastrous day for the pound saw Labour take its biggest poll lead over Tories for more than 20 years. The Treasury moved to settle the markets with the promise of a Budget next spring as sterling tumbled to its lowest level against the dollar for at least half a century on Monday.
Senior Tory MP Huw Merriman, who backed former chancellor Rishi Sunak for Conservative leader, warned Liz Truss may be losing voters “with policies we warned against”, as a new YouGov survey put Labour 17 points ahead, the party’s greatest lead since the firm started polling in 2001. Lenders were withdrawing some of their mortgages on Monday as uncertainty reigned in the wake of Mr Kwarteng’s £45 billion package of tax cuts set out on Friday.
Meanwhile, the Bank of England said it “will not hesitate” to raise interest rates to prop up the value of sterling. The pound fell by more than 4% to just 1.0327 dollars in early Asia trade, before regaining some ground to about 1.07 dollars on Monday evening.
