Pound falls after Liz Truss U-turn, as IFS warns ‘piecemeal’ changes won’t cut it

Sterling dips and cost of government borrowing rises despite PM’s bid to reassure markets

Liz Truss’s bid to calm the markets by sacking her chancellor and U-turning on corporation tax appears to have failed as the pound fell again and the cost of government borrowing rose after her press conference on Friday.

Trading in the pound and gilts – UK government bonds – became more positive early on Friday after reports that parts of the Truss government’s tax-cutting mini-Budget would be scrapped.

But the markets did not react well to the prime minister’s seven-minute appearance at No 10, at which she announced she would let corporation tax rise from 19p to 25p and was replacing Kwasi Kwarteng with Jeremy Hunt.