Prime Minister Liz Truss and Chancellor Kwasi Kwarteng have insisted their £45bn package of tax cuts announced in last Friday's mini budget is the "right plan" to get the economy moving, with the new Chancellor visiting Darlington on Thursday.
Kwarteng was in the region to visit one of Darlington's largest local employers, Cummins, speaking to employees about the Government's growth plans and the Investment Zones at the heart of them, with the Tees Valley Combined Authority and mayor Ben Houchen expressing interest in establishing such a zone.
However, the pressure is on Truss and Kwarteng to deal with the UK's current financial state first, after the pound hit a record low on Monday following the mini-budget. Kwarteng made his first public comments since Monday, saying that the package he announced in the Commons on Friday was "absolutely essential" if the economy was to generate revenues needed to fund public services.
Read more: How the mini-budget affects you - including benefits, tax cuts and stamp duty
Liz Truss also spoke out on the plans today, in a round of interviews on BBC local radio, including on BBC Radio Tees. After the interviews kicked off with BBC Leeds host Roma Ahmed asking: "Where've you been?", Ms Truss said the Government had to take "urgent action" to kick-start the economy and protect consumers from rising energy costs.
However, Labour has warned that ordinary families would pay the prices with thousands added to mortgage bills as the Bank of England will be forced to increase interest rates to shore up the pound. Fears among Tory MPs that the financial fallout could hurt their chances of being re-elected were proven as a YouGov poll for The Times showed Labour opening up a massive 33-point lead over Conservatives.
The market chaos of recent days has resulted in reports of unease among Tory MPs, with some calling for an urgent change of course from Ms Truss. Julian Smith, a former Cabinet Minister, urged the Government to "take responsibility", tweeting: "The Government must scrap 45p, take responsibility for the link between last Friday and the impact on people’s mortgages and make clear that it will do everything possible to stabilise markets and protect public services."
Shadow chancellor Rachel Reeves called on Truss and Kwarteng to reverse their "kamikaze budget," saying: "It is disgraceful that the family finances of people across the country are being put on the line simply so the Government can give huge unfunded tax cuts to the richest companies and those earning hundreds of thousands of pounds a year. This is a serious situation made in Downing Street and is the direct result of the Conservative Government’s reckless actions."
Meanwhile, Kwarteng was put under renewed pressure to bring forward his planned statement setting out how he intends to get public finances back on track after the Office for Budget Responsibility (OBR) said it could produce a preliminary set of forecasts by October 7. The Chancellor had previously intended to deliver his medium-term fiscal plan explaining how he would get debt falling as a percentage of GDP, alongside latest updated OBR forecasts on November 23.
However, the absence of any forecasts to accompany Friday's "fiscal event" was seen as a key factor in spooking the markets, many Tory MPs believe that it is too long to wait if they are to restore stability. Mel Strike, Conservative chairman of the Commons Treasury Committee said it should be brought forward to late October, or earlier, due to an "urgent need" to increase the confidence of the markets.
Kwarteng rejected suggestions the mini-budget had been a "major economic disaster", saying: "Without growth you are not going to get the public services, we are not going to generate the income and the tax revenue to pay for public services. That’s why the mini-budget was absolutely essential in re-setting the debate around growth and focusing us on delivering much better outcomes for our people."
The Prime Minister told BBC Radio Leeds: "We had to take urgent action to get our economy growing, get Britain moving and also deal with inflation. Of course that means taking controversial and difficult decisions but I am prepared to do that."
Their comments came after the Bank launched an emergency Government bond-buying programme on Wednesday to prevent borrowing costs from spiralling out of control, buying up to £65bn worth of Government bonds, known as gilts. Fears over the Government's tax-cutting plans sent the pound tumbling, and some UK pension funds teetered on the brink of collapse - though the pound did regain some ground on Thursday - rising to above 1.1 dollars for the first time since the mini-budget.
However, the FTSE 100 dropped around 2% to 6,864, its lowest point since March this year. Huw Pill, the Bank's chief economist underlined warnings that they would have to sharply raise interest rates, noting an "undoubtedly UK-specific component" to recent market movements.
This is despite Ms Truss blaming "Vladimir Putin's war in Ukraine" for pushing up global energy prices.
Trade unions earlier called for a "cast-iron guarantee" that no more cuts would be made to public spending after Treasury Chief Secretary Chris Philp confirmed Whitehall department had been instructed to carry out an "efficiency and prioritisation exercise" in the hope of finding savings.
Speaking to broadcasters, Kwasi Kwarteng said that despite pressures on public finances, the Government would maintain the state pension "triple lock" but refused to commit to uprating benefits in line with inflation. He said: "It’s premature for me to come to a decision on that, but we are absolutely focused on making sure that the most vulnerable in our society are protected through what could be a challenge."
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