A senior Conservative MP has said that Liz Truss must not nibble at the edges, but instead perform a powerful and significant U-turn with its so-far disastrous economic plan.
Mel Stride, chair of the Treasury Select Committee, told the BBC's Today programme: My personal view is that it is a U-turn that we need this very powerful and significant signal to the markets that fiscal credibility is firmly back on the table, and I think that means doing something right now and not delaying.
That will be unwinding the position on corporation tax, if you do something very significant at the heart of it.
The danger here is the argument in the room lands in a place where they decide to nibble at the edges, and I m afraid I don't think that will cut it, and you could end up in that situation in the worst of all worlds where you ve U-turned but doesn't settle the markets in the way we need to. The chancellor, Kwasi Kwarteng, has cut short a visit to Washington DC on Thursday, adding that the government is about to announce a U-turn over its plan to scrap a rise in corporation tax, a centrepiece of its much vaunted growth plan. The chancellor was expected to meet with the prime minister on Friday morning.
Kwarteng s so-called mini-budget, fully endorsed by Truss, sent shockwaves through the financial markets with its 45 billion package of unfunded tax cuts.
The yield on gilts, UK government bonds went up on the back of the announcement on 23 September, a sign of a crashing investor confidence in the UK's fiscal credibility.
Stride said he hoped the chancellor would get the chancellor to have conversations with the prime minister and row back on the tax cuts announced in the mini-budget.
He told BBC Radio 4: Well it could be that a U-turn is about to happen and of course he will want to be in the room discussing that if that is about to happen. Stride said later on BBC Breakfast that his advice to Kwarteng over rowing back on tax cuts was: Do it now. The comments came after Kwarteng insisted he was not going anywhere and he would publish his mid-term fiscal plan on October 31 with assessments from the Independent Office for Budget Responsibility OBR. Trade minister Greg Hands, who supported Truss's rival Rishi Sunak in the Tory leadership contest, denied reports that MPs were plotting to remove Truss.
Hands said he does not recognise reports that senior Tories are plotting to replace Truss with a joint ticket of Sunak and Penny Mordaunt.
The trade minister told Sky News: I was a supporter of Rishi Sunak, but somehow I was very surprised at that story.
I was talking to Penny Mordaunt only yesterday. Hands, who was a prominent backer of Sunak, was asked if the markets would have more confidence if Sunak was in No 10.
He said that Rishi Sunak did not win the leadership contest, but Liz Truss did win the leadership contest. Hands said let s wait and see when asked if there would be any more U-turns on the mini-budget.
He told Sky News: Let s wait and see. You won't have long to wait for the chancellor to lay out those plans on 31 October. I think the prime minister and chancellor are absolutely resolute and determined.