The prime minister’s initial instinct had been to stand firm and say little or nothing while faced with market turmoil, spiking borrowing costs, and the drop in the value of the pound in foreign exchange markets.
However, after a meeting with Chancellor Kwasi Kwarteng yesterday, Ms Truss agreed the Treasury would issue a statement promising further details on 23 November on how the government would ensure borrowing would not spiral out of control.
In effect, this gives the government eight weeks to come up with a plan to stabilise the markets – likely to involve spending cuts in Whitehall, public services, investment, and probably welfare.
The government will reject claims circulating in Whitehall that the meeting between Ms Truss and Mr Kwarteng was “argumentative” and descended into a “shouting match”.
This comes as the chancellor plans to hold further emergency meetings with global bankers this week to discourage them from speculating on the pound.
There is deep concern in the City that Treasury ministers are still gunning for Andrew Bailey, the governor of the Bank of England, and his two most senior lieutenants, with some believing that removing this team from office would dent Britain’s global reputation for stability.
Sky News can confirm that Monday’s meeting between the chancellor and prime minister concentrated on whether to issue a statement and what to say, with the two sides initially taking different positions.
One source said that the chancellor was more sympathetic to the Bank’s concerns than the PM.
The prime minister’s team was aware that the Bank of England was going to issue a statement after the close of markets on Monday.
In the end, the Treasury issued an almost simultaneous statement promising to release economic forecasts by the Office for Budget Responsibility and a plan on debt on 23 November.
Source: Skynews