Kwarteng faces tough meeting with City leaders

The market reaction to his tax-cutting mini-budget is a concern for Kwasi Kwarteng, who is facing a fraught meeting of City bosses at the Treasury.

Kwarteng and new city minister Andrew Griffith will welcome senior leaders from banks, insurance companies and asset managers today, Bloomberg reports.

The aim of the meeting was to come up with some bold ideas for the government's Big Bang 2 plans to re-energise the city.

It will be more of a crisis summit than a convivial conversation because of the slump in the pound and the brutal selloff in gilts. Kwarteng will not be able to get away with dismissing the sterling crisis as mere market gyrations.

Bankers were supposed to be wowed by measures such as the end of a cap on bonuses and the sabotage of the 45% top tax rate, and the early reaction from industry bodies was positive on Friday. Monday s markets meltdown, which sent the UK's borrowing costs soaring, killed off those good vibes. Kwarteng will need to show that he understands the seriousness of the drop in the pound and gilts rather than characterizing them as short-term fluctuations, several financiers said.