City minister Andrew Griffith has said the past week’s financial markets turmoil is not the government’s fault as a Tory backlash against the Prime Minister builds.
Griffith told Sky news that “every major economy is dealing” with market volatility, after the Bank of England made a stunning decision today to start buying up UK gilts to stabilise the bond market.
He said the government would plough on with the tax cuts unveiled last week – the largest package of tax cuts since 1972 – and that they were the “right plans”.
When asked if the massive sell-off of UK bonds and the pound was the government’s fault, Griffith said: “No, we both know that we’re seeing the same impact of Putin’s war in Ukraine cascading through things like the cost of energy, some of the supply side implications of that.
“And that’s impacting every major economy and just the same, every major economy, you’re seeing interest rates going up as well.”
Truss and chancellor Kwasi Kwarteng are beginning to come under attack from their own Tory backbenchers, with Simon Hoare saying “this inept madness cannot go on”.
“These are not circumstances beyond the control of the government and Treasury. They were authored there,” he said.
High Peak MP Robert Largan said the decision to cut the top rate of tax from 45p to 40p was “a mistake”.
There is now a growing number of Rishi Sunak supporters who will not be attending next week’s Tory party conference, with speculation there will be a boycott from many MPs.
It was revealed by Sky News that the Bank of England intervened in the bond market today to stop the potential collapse of a series of British pension funds.
The big drop in bond prices over the past few days has resulted in banks and fund managers demanding pension funds suddenly stump up cash to back up their investments.
Number 10 has said that Truss will not make a statement today to address the recent turmoil, however she will be doing a morning round of broadcast interviews tomorrow.