Liz Truss under pressure from senior Tory MPs to rethink tax cuts
The government may have to rethink its tax-cutting plans to reassure financial markets and stabilise the economy, some senior Conservative MPs have said.
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The warnings came ahead of a bruising appearance for the prime minister at a meeting of Tory backbenchers.
One loyal minister told the BBC: "We are completely in a dreadful place. There is no way out - maybe Liz Truss will find a way, but I cannot see it."
Ms Truss has repeatedly defended the proposed tax cuts outlined last month.
The chancellor's mini-budget on 23 September, which included £45bn of tax cuts funded by borrowing, sparked turmoil on financial markets and prompted the Bank of England to intervene to protect pension funds.
Kwasi Kwarteng is due to set out how he will fund the package and reduce debt on 31 October.
Ms Truss has denied she is planning public spending cuts, saying the government would instead focus on reducing debt "by making sure we spend public money well".
However, Mel Stride, a prominent backer of Ms Truss' leadership rival Rishi Sunak, suggested the government would need to show a "clear change of tack" to restore credibility with the financial markets.
"Given the clear government position expressed today on protecting public spending there is an emerging question. Whether any plan that does not now include at least some element of further row back on the tax package can actually satisfy the markets," he said.