Prime Minister Liz Truss is to hold a press conference later on Friday Downing Street has said. It comes amid Budget chaos that has seen Chancellor Kwasi Kwarteng return home early from a trip to the USA.
The government is expected to make more U-turns in its mini-Budget announcements on taxes. Kwasi Kwarteng is flying back to London for crisis talks with Liz Truss amid turmoil in the Tory Party and intense speculation he will have to dismantle key elements of his controversial mini-budget.
The Chancellor cut short his visit to the annual meeting of the International Monetary Fund (IMF) in Washington DC as Conservative MPs questioned whether he and the Prime Minister can survive the coming days.
After days of chaos, there was greater calm on the financial markets following reports that Mr Kwarteng is preparing to abandon parts of his £43 billion tax giveaway.
However, the situation remains precarious with the emergency support package put in place by the Bank of England to protect pension funds from collapse due to end on Friday.
At Westminster, there were reports of fevered plotting among Tory MPs amid suggestions that Ms Truss’s two main rivals for the Tory leadership over the summer – Rishi Sunak and Penny Mordaunt – could be installed at the head of a new administration.
Before he left the United States, Mr Kwarteng initially insisted he stood by his economic growth plan and would be setting out how he intended to get the public finances back on track in a statement on October 31 as planned.
However, few MPs believe he can afford to wait that long, and in a later interview with The Daily Telegraph he said only “let’s see” when asked if he could ditch his promise on corporation tax.
The commitment to scrap the planned increase in the levy on corporate profits from 19% to 25% is widely seen as likely to be the first element to go if the expected U-turn goes ahead.
However it is unclear whether that would be enough to settle the markets, which have already “priced in” significant changes.
The senior Conservative MP Mel Stride, who chairs the Commons Treasury Committee, said it was essential that the Government acted decisively if it was to restore confidence.
“The danger here is that they decide they are going to nibble at the edges of this and don’t think that will cut it,” he told the BBC.
“You could end up in that circumstance in the worst of worlds – that you’ve U-turned but it doesn’t settle the markets.”
A Treasury spokesman said: “After completing a successful series of meetings at the IMF, the Chancellor is returning to London today to continue work at pace on the medium-term fiscal plan.”
Trade Minister Greg Hands, meanwhile, refused to rule out possible changes ahead of the October 31 statement, telling Sky News the Government “will make responses as appropriate as events happen”.
Mr Hands brushed off suggestions Ms Truss could be forced to sacrifice Mr Kwarteng to preserve her own job, insisting his position was “totally safe”.
“I know the Prime Minister has got total confidence in Kwasi Kwarteng,” he said, adding that the Chancellor was “an incredibly capable person, a very, very bright person who makes good judgment calls”.
Mr Hands, who backed Mr Sunak in the leadership election, also dismissed suggestions the former chancellor could be installed at the head of a new government on a joint ticket with Ms Mordaunt.
“I don’t recognise that story at all,” he said.
However former culture secretary Nadine Dorries angrily accused Mr Sunak’s supporters of agitating to get rid of the Prime Minister.
She tweeted: “They agitated to remove Boris Johnson and now they will continue plotting until they get their way. It’s a plot not to remove a PM but to overturn democracy.”
On the markets, Government bonds and the pound have steadied at the start of London trading on Friday as the Bank of England’s bond-buying programme comes to a close.
Yields on UK 30-year gilts fell back by 1.6% to 4.47%, while 10-year gilt yields moved 1.8% lower to 4.11%.
Meanwhile, the pound was 0.3% higher at 1.127 against the US dollar as trading sentiment improved.
Liz Truss needs to hang on as prime minister until the start of next year to avoid her premiership becoming the shortest in British history.
The person who currently holds the title is the Tory statesman George Canning, who spent 118 full days as prime minister in 1827 before dying in office from ill health.
Ms Truss would overtake this number of days on January 3 2023.
There have been several prime ministers who for various reasons failed to last a year in the job.
They include two Conservative PMs in the past 100 years: Andrew Bonar Law, who clocked up 211 days from 1922 to 1923 before resigning due to poor health, and Alec Douglas-Home, who managed 364 days in 1963-64 until losing a general election.
During the 18th and early 19th century it was not unusual for prime ministers to serve for only one or two years, or to do the job for a short spell on several separate occasions.
Once Liz Truss has passed the 118-day mark set by George Canning, other predecessors she can aim to overtake include the 4th Duke of Devonshire, who was PM for 225 days in 1756-57, and the 2nd Earl of Shelburne, who managed 265 days in 1782-83.
Meanwhile, Kwasi Kwarteng has already ensured he will not become the shortest serving Chancellor of the Exchequer in modern history.
Mr Kwarteng has now clocked up 38 full days in the role, eight more than those managed by the Conservative Iain Macleod, who died in office after just 30 days in 1970.
