Kwarteng faces crisis meeting with bankers

Kwasi Kwarteng met Britain’s top bankers and other senior City figures this week in planned talks that became a crisis meeting after an earlier sell-off of the pound and government bond market meltdown.

Banks emerged among the biggest beneficiaries of last Friday’s mini-budget when the chancellor scrapped the EU banker bonus cap and the top 45% rate of income tax, cut stamp duty and trailed “an ambitious package of regulatory reforms” to be unveiled in the coming months.

However, the announcement sent the pound and government bonds plunging, as the scale of the tax cuts, which overwhelmingly benefit the better-off, shocked markets and prompted worries about how they will be paid for.

The Treasury moved to settle the markets with the promise of a budget next year as sterling on Monday tumbled to its lowest level against the dollar for at least half a century. Meanwhile, the Bank of England said it “will not hesitate” to raise interest rates to prop up the value of sterling.

Meanwhile, in her speech to the Labour conference, the shadow chancellor, Rachel Reeves, vowed to reinstate the top 45% rate of income tax and put the money into NHS recruitment. In her speech on Monday, she insisted the government’s chaotic handling of the economy underlined that Labour was now the party of economic competence.

A YouGov survey put Labour 17 points ahead of the Tories, the party’s greatest lead since the firm started polling in 2001.