Trust in Liz Truss is speedily diminishing, it would seem, with kind words about her first weeks in government few and far between.
The prime minister faces MPs on Wednesday for the first time since Chancellor Kwasi Kwarteng’s £43 billion mini-budget tax giveaway unleashed chaos in the financial markets.
Tories have returned to Westminster in a restive mood following the break for the party conferences, with their ratings tanking in opinion polls and economists questioning whether Mr Kwarteng’s plans are sustainable.
There was further turmoil on Tuesday after the Bank of England announced that its emergency support operation to protect pension funds would end this week.
Earlier, the Bank intervened for the second time in as many days to buy up Government bonds, warning of a “material risk to UK financial stability” with “fire sales” of assets if did not act.
But speaking in Washington, the Bank Governor Andrew Bailey said there could be no further support beyond Friday and it was up to the funds concerned to rebalance their holdings.
“My message to the funds involved – you’ve got three days left now. You have got to get this done,” he said.
Following Mr Bailey’s remarks, sterling fell more than a cent against the dollar to its lowest rate since September 29.
The pound was lower against both the dollar and euro on Wednesday morning amid continued unease among financial traders.
Sterling fell by 0.85 per cent to 1.099 against the dollar. It came after the pound rose as high as 1.1180 on Tuesday but slumped sharply after the Governor’s warning to pensions funds.
Ahead of PMQs, ‘Tory chaos’ was trending on Twitter.
This editorial from The Economist also got a few people talking:
