Kwasi Kwarteng will not resign as Liz Truss stands by Chancellor

Kwasi Kwarteng met representatives from the investment banking sector on Wednesday - Simon Walker/HM Treasury
Kwasi Kwarteng met representatives from the investment banking sector on Wednesday - Simon Walker/HM Treasury

Kwasi Kwarteng will not resign over the market turmoil that has followed his “mini-Budget” as Liz Truss confirmed that she would stand by the Chancellor.

Number 10 sources confirmed that Mr Kwarteng would not quit on a day that saw the Bank of England forced into a rare intervention in an attempt to stave off a pensions crisis.

The Bank staged a £65 billion intervention as it started to buy up Government bonds, which it hopes will break the recent self-reinforcing market spiral.

But the Chancellor, who on Friday promised a “new approach for a new era” as he set out the biggest tax-cutting measures in decades, is to stay at Number 11 amid early signs of discontent on the backbenches.

He also continues to enjoy the full confidence of Ms Truss, who promised tax cuts on the campaign trail last month and pledged to “govern as a conservative” on entering office.

A Downing Street spokesman said: “The Prime Minister and the Chancellor are working on the supply side reforms needed to grow the economy, which will be announced in the coming weeks.”

There were reports on Wednesday that some Tory MPs wanted Mr Kwarteng to quit, but no backbenchers have said this publicly and only a handful have gone over the top with broader objections.

These included Simon Hoare, the chairman of the Northern Ireland select committee and an ally of Rishi Sunak. Mr Hoare compared Wednesday to the infamous Black Wednesday of 1992 on Twitter, and quoted Norman Lamont’s famous line that “today has been a very difficult day”.

He added: “These are not circumstances beyond the control of the Government or the Treasury – they were authored there. This inept madness cannot go on.”

Robert Largan, the MP for High Peak, voiced his “serious reservations” about the abolition of the 45p top rate of income tax and said it was a “mistake”.

It came as Andrew Griffith, the Financial Secretary to the Treasury, defended Mr Kwarteng’s package of measures and said that “we think they are the right plans”.

“We are seeing the same impacts of Putin’s war in Ukraine cascading through things like the cost of energy, some of the supply side implications of that,” he told Sky News.

“That’s impacting every major economy. Every major economy you are seeing interest rates going up as well. Every major economy is dealing with exactly these same issues.”