Liz Truss and her chancellor Kwasi Kwarteng will be forced to impose a “savage” £60bn austerity hit unless they reverse more of their tax cuts, experts and rebel Conservative MPs have warned.
Britain is heading for recession until 2024 and Mr Kwarteng will be forced to either abandon his mini-Budget giveaways or cut public services by some 15 per cent, the Institute for Fiscal Studies (IFS) said.
And Tory MPs warned there would be strong opposition to the latter option, with one former minister tellingThe Independent: “There is no way Tory MPs are going to stomach savage austerity in a post-Covid cost of living crisis. Liz has driven herself into a cul-de-sac.”
It came as the Bank of England was forced to step up its emergency intervention in the government bond market, warning of a “material risk to UK financial stability”.
While deputy prime minister Therese Coffey was unaware of the announcement as she appeared on Sky News, she suggested that Mr Kwarteng believed the country’s finances were in a “good state”.
