The tax cuts announced in the “mini” budget were very much Ms Truss’s policies and featured prominently in her Tory leadership campaign. A reversal will represent a political disaster for her.
Gilts extended a rally from Thursday into Friday afternoon, with the yield on the 30-year bond down 0.07 percentage points to 4.47 per cent as its price rose sharply. The pound slipped 0.4 per cent to $1.1283 against the dollar. “The problem is she’s only got around 25 per cent of the parliamentary party backing her — if that,” one veteran Tory told the Financial Times. “She’s got a lot of disgruntled MPs to manage.”
“If it doesn’t happen, then the markets may have an adverse reaction to that,” he told the BBC. “So my advice to the chancellor would firmly be: ‘Do it, do it now, make sure it’s something significant, not just nibbling at the edges but something that’s going to be firm, bold and convincing, and do it as soon as possible.’”“What is now being kind of mooted is that there will be some sort of compromise that can still be presented as radical economics,” he said, speaking on Sky News.