Kwasi Kwarteng has come under renewed pressure to reverse measures from his mini-budget, as the markets, senior Tory MPs and international organisations continued to react negatively to the Government’s growth plan.

The Chancellor yesterday faced down members of his own party in Parliament following the Commons’ conference recess, with Julian Smith, the former chief whip warning Mr Kwarteng not to balance tax cuts “on the back of the poorest people in our country”.

He was joined in the debate by Mel Stride, chairman of the Treasury select committee, who said the Chancellor needs to reach out to members across Parliament to be “absolutely certain” he can get his financial package approved, or risk unsettling the markets.

Their intervention came after the Bank of England was forced to step in with emergency action for a second day running to stop a “fire sale” of government bonds, as the mini-budget continued to disrupt the economy.

A video grab from footage broadcast by the UK Parliament's Parliamentary Recording Unit (PRU) shows Britain's Chancellor of the Exchequer Kwasi Kwarteng, answering questions in the House of Commons, in London, on October 11, 2022. - The Bank of England unveiled on October 11, 2022 more measures aimed at calming markets rocked by a UK budget as it warned over risks to the nation's financial stability. Finance minister Kwasi Kwarteng will unveil debt-reduction plans and independent economic predictions on October 31 rather than in late November. It comes after Chancellor of the Exchequer Kwarteng was already forced to axe a tax cut for the richest earners, in the face of outrage as millions of Britons face a cost-of-living crisis with UK inflation around 10 percent. (Photo by PRU / AFP) / RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT "AFP PHOTO / PRU " - NO MARKETING - NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS (Photo by -/PRU/AFP via Getty Images)

The Bank warned that sell-off poses a “material risk” to the UK’s financial stability, and decided to widen its bond-buying programme which it launched two weeks ago.

Their action was met with further warning from the Pensions and Lifetime Savings Association (PLSA) that the Bank needed to extend its emergency action to keep pension funds safe.

This is despite assurances from Therese Coffey, the Deputy Prime Minister, that she was “absolutely confident pensions are safe”.

Yesterday the Chancellor set off to Washington for a meeting with global policymakers, including the International Monetary Fund (IMF), which once again criticised Mr Kwarteng’s policies as part of its roundup of economies around the world.

The IMF admitted that the Government’s fiscal strategy, which was moved forward to the end of the month by the Chancellor in a U-turn on Monday, could help settle the turmoil seen in the markets, but would face difficulties in the long-term.

The body noted that the world faces “stubbornly” high inflation, and despite upgrading the UK’s growth rate for this year from its previous forecast to 3.6 per cent, it would sharply in 2023 to just 0.3 per cent, a downgrade on its previous estimates.

Just Germany and Italy will see weaker growth than the UK among the world’s advanced economies, the IMF said.

The bleak outlook for the economy has meant the Government has come under further pressure to explain how it will pay for its tax-cutting pledges, if it will not reverse the measures announced in Mr Kwarteng’s budget last month.

Downing Street yesterday confirmed that it will announce the decision on whether benefit claimants will see a real-term drop in income as part of the Chancellor’s fiscal plan at the end of the month.

The Prime Minister’s official spokesperson dismissed suggestions that there will be a return to austerity, despite suggestions that £60 billion of cuts will be needed to balance the books.

Stark predictions by the Institute for Fiscal Studies (IFS) yesterday said that efficiency savings by “trimming the fat” were not enough, and that cuts of the scale required would be “extraordinarily” hard to achieve.

Last night the Government announced that generators of renewable energy and nuclear power plants could have their revenues capped, in order to make sure they do not profit from record-high energy prices.

The “cost-plus revenue limit” was seized upon by Labour as another U-turn following the Government’s seeming unwillingness to back its calls for a further “windfall tax” on the profits of electricity generators.

Kwarteng under pressure to reverse mini-budget, as Bank of England forced to step in again