Tory MPs are already submitting letters of no confidence in Liz Truss amid fear she might “crash the economy”.
Sterling fell by more than 4 per cent to just 1.0327 dollars in early Asia trade on Monday before it regained some ground to about 1.08 dollars later on in the day.
Lenders were also withdrawing some of their mortgages as uncertainty reigned in the wake of Kwasi Kwarteng’s £45 billion package of tax cuts set out on Friday.
Govt vs Bank
A former Tory minister MP has told Sky News the new PM is done for on the back of the news and the party are already looking to bring her down.
The MP said: “They are already putting letters in as think she will crash the economy. The tax cuts don’t matter as all noise anyway – mainly reversing back to the status quo this year.
“The issue is government fiscal policy is opposite to Bank of England monetary policy – so they are fighting each other. What Kwasi [Kwarteng] gives, the Bank takes away.”
Another Tory MP told the broadcaster that Friday’s announcement – which included reversing a 1.25 per cent hike in National Insurance – had been a “s***show”.
They said they weren’t aware of any coordinated plan to vote down government legislation, but added they would not rule out something happening given what has happened in the last few days.
Elsewhere, new polling showed Labour now has a 17-point lead over the Tories.
Kwasi Kwarteng’s decision to scrap the 45 per cent rate of tax for those earning more than £150,000 was opposed by 72 per cent of voters including 69 per cent of those who backed the Conservatives in 2019.
Just 9 per cent of voters thought that the measures outlined in the budget would make them better off, while only 15 per cent believed they would achieve the government’s aim of kickstarting economic growth.