Jeremy Hunt insisted on Sunday that Liz Truss is still in charge of her Government, as he signalled plans to effectively scrap the economic vision that brought her to power.
The new Chancellor, brought in to replace the sacked Kwasi Kwarteng and restore credibility to Downing Street, is now widely seen as the most powerful figure in Government as he attempts to re-shape the Prime Minister’s own economic plans to reassure the markets.
He told the BBC’s Sunday with Laura Kuenssberg programme that Ms Truss remains “in charge” and insisted voters can still put their faith in her.
“She’s listened. She’s changed. She’s been willing to do that most difficult thing in politics, which is to change tack,” he said. What we’re going to do is to show not just what we want but how we’re going to get there.”
It comes ahead of a crunch two weeks for the Government, as Mr Hunt bids to put together a new fiscal plan – effectively a full Budget – that can restore some order to the chaos of Ms Truss’s first few weeks in office.
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Politics live: Chancellor admits “mistakes” were made in the mini-budget
Prime Minister Liz Truss is to hold a press conference amid speculation of a major U-turn on Chancellor Kwasi Kwarteng’s mini-budget.
Mr Kwarteng flew back to London on Friday for crisis talks after cutting short a visit to the International Monetary Fund’s annual meeting in Washington.
It follows days of turmoil in the markets amid concerns about the impact of his £43 billion tax giveaway on the public finances.
Liz Truss will sack Chancellor Kwasi Kwarteng and announce plans to raise corporation tax, the Times reports.
The chancellor is due to meet the prime minister shortly after flying back from Washington, with discussions under way in No 10 and No 11 before a public statement by the Prime Minister.
Kwarteng flew back early from Washington overnight. The PM is also expected to reverse her corporation tax cut.
Kwasi Kwarteng has been sacked as Chancellor, the BBC reports.
That would make him the second shortest Chancellor on record.
Liz Truss will hold her press conference at 2pm, in which she is expected to announce a U-turn on corporation tax and the sacking of Chancellor Kwasi Kwarteng.
The value of the pound has fallen sharply after reports emerged that Kwasi Kwarteng has been sacked.
Sterling is below $1.12, 1.3% lower than previously.
Liz Truss’ press conference will be shown on the BBC iPlayer and news channel. It is expected to be shown on BBC One as well, but the schedule has yet to be updated.
Kwasi Kwarteng has confirmed he has stood down as Chancellor.
In his letter to Liz Truss, Kwasi Kwarteng wrote: “Dear Prime Minster.
“You have asked me to stand aside as your Chancellor. I have accepted.
“When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation — that must still change if this country is to succeed.
“The economic environment has changed rapidly since we set out the Growth Plan on 23 September. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I commend my officials for their dedication.
“It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.
“We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first Chancellor.
“Your success is this country’s success and I wish you well.”
The Prime Minister’s press conference will be held at 2.30pm in the Downing Street briefing room, No 10 has said.
Jeremy Hunt will be the new Chancellor of the Exchequer.
Downing Street has confirmed that the former Health Secretary will replace Kwasi Kwarteng, who was sacked by Prime Minister Liz Truss earlier today.
Hunt put himself forward in the Tory leadership race over the summer, but after not gaining sufficient support from fellow MPs backed Truss’ main opponent Rishi Sunak.
The new Chancellor will be tasked with reassuring the financial markets after Kwarteng’s unpopular, tax-slashing mini budget plunged the country into economic chaos.