Chancellor Kwasi Kwarteng is due to meet bankers today in an effort to calm nerves after his mini-budget spooked the markets and sent the pound crashing.
Sky News understands he will ask financiers not to bet against the pound, which has fallen to record lows against the dollar in recent days.
He is also expected to underline his commitment to fiscal discipline and will talk about a “Big Bang 2.0 event” from his growth plan.
In an extraordinary statement on Tuesday, the International Monetary Fund (IMF) said it was “closely monitoring” developments in the UK and urged Mr Kwarteng to “re-evaluate the tax measures”.
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It said that the plans, including the abolition of the 45p rate of income tax for people earning more than £150,000, are likely to increase inequality.
Some have been openly expressing concerns about the new economic approach, and the effect it has had on financial markets, saying the party risks trashing its reputation for managing the economy with voters.
Veteran Conservative MP Sir Roger Gale says that another financial crash may be on the way.
Speaking to Good Morning Britain, he said the situation amounts to a “perfect storm”.
He added: “I’m sadly old enough to remember the last financial crash.
“When… people would come into the surgery in tears because they were losing homes and they were losing businesses.
“It was not a pretty sight and I don’t want to see it happen again.”
Chancellor defends budget in phone call with Tory MPs
Sky News understands that the chancellor stood by his decision to cut taxes for the highest earners on his call yesterday, telling MPs “it was a tough choice but the right choice”.
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Sky’s economics and data editor Ed Conway takes a look at the most recent numbers on the pound’s volatility.
He argued his fiscal strategy was focused on the medium-term, and was aimed at showing voters “we can be more efficient in how we spend taxpayers’ money”.
He went on to say that the economic situation would be better in 2024, before what he said was always going to be a “tricky” general election – with Labour currently surging ahead in the polls.
He told MPs that he was establishing a “good working relationship” with the governor of the Bank of England and was in daily contact with him.
He also acknowledged that markets had been volatile but said they were now “settling down” and argued the turmoil reflected a frustration that the markets had not known everything that was included in the mini-budget.
The taxpayer is to help drive the switch to non-polluting vehicles through a new grant of up to £3,750, but some of the cheapest electric cars are to be excluded.
The Department for Transport (DfT) said a £650m fund was being made available for the Electric Car Grant, which is due to get into gear from Wednesday.
Users of the scheme – the first of its kind since the last Conservative government scrapped grants for new electric vehicles three years ago – will be able to secure discounts based on the “sustainability” of the car.
It will apply only to vehicles with a list price of £37,000 or below – with only the greenest models eligible for the highest grant.
Buyers of so-called ‘Band two’ vehicles can receive up to £1,500.
The qualification criteria includes a recognition of a vehicle’s carbon footprint from manufacture to showroom so UK-produced EVs, costing less than £37,000, would be expected to qualify for the top grant.
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It is understood that Chinese-produced EVs – often the cheapest in the market – would not.
Image: BYD electric vehicles before being loaded onto a ship in Lianyungang, China. Pic: Reuters
DfT said 33 new electric car models were currently available for less than £30,000.
The government has been encouraged to act as sales of new electric vehicles are struggling to keep pace with what is needed to meet emissions targets.
Challenges include the high prices for electric cars when compared to conventionally powered models.
At the same time, consumer and business budgets have been squeezed since the 2022 cost of living crisis – and households and businesses are continuing to feel the pinch to this day.
Another key concern is the state of the public charging network.
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The Chinese electric car rivalling Tesla
Transport Secretary Heidi Alexander said: “This EV grant will not only allow people to keep more of their hard-earned money – it’ll help our automotive sector seize one of the biggest opportunities of the 21st century.
“And with over 82,000 public charge points now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”
The Government has pledged to ban the sale of new fully petrol or diesel cars and vans from 2030 but has allowed non-plug in hybrid sales to continue until 2025.
It is hoped the grants will enable the industry to meet and even exceed the current zero emission vehicle mandate.
Under the rules, at least 28% of new cars sold by each manufacturer in the UK this year must be zero emission.
The figure stood at 21.6% during the first half of the year.
The car industry has long complained that it has had to foot a multi-billion pound bill to woo buyers for electric cars through “unsustainable” discounting.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the grants sent a “clear signal to consumers that now is the time to switch”.
He went on: “Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade.”
But the Conservatives questioned whether taxpayers should be footing the bill.
Shadow transport secretary Gareth Bacon said: “Last week, the Office for Budget Responsibility made clear the transition to EVs comes at a cost, and this scheme only adds to it.
“Make no mistake: more tax rises are coming in the autumn.”
A leading financier and Conservative Party donor is among the contenders vying to chair Channel 4, the state-owned broadcaster.
Sky News has learnt from Whitehall sources that Wol Kolade has been shortlisted to replace Sir Ian Cheshire at the helm of the company.
Mr Kolade, who has donated hundreds of thousands of pounds to Tory coffers, is said by Whitehall insiders to be one of a handful of remaining candidates for the role.
A recommendation from Ofcom, the media regulator, to Culture Secretary Lisa Nandy about its recommendation for the Channel 4 chairmanship is understood to be imminent.
Mr Kolade, who heads the private equity firm Livingbridge, has held non-executive roles including a seat on the board of NHS Improvement.
He declined to comment when contacted by Sky News on Monday.
His candidacy pits him against rivals including Justin King, the former J Sainsbury chief executive, who last week stepped down as chairman of Ovo Energy.
Debbie Wosskow, an existing Channel 4 non-executive director who has applied for the chair role, is also said by government sources to have made it to the shortlist.
Sir Ian stepped down earlier this year after just one term, having presided over a successful attempt to thwart privatisation by the last Tory government.
The Channel 4 chairmanship is currently held on an interim basis by Dawn Airey, the media industry executive who has occupied top jobs at companies including ITV, Channel 5, and Yahoo!.
The race to lead the state-owned broadcaster’s board has acquired additional importance since the resignation of Alex Mahon, its long-serving chief executive.
It has since been reported that Alex Burford, another Channel 4 non-executive director and the boss of Warner Records UK, was interested in replacing Ms Mahon.
Ms Mahon, who was a vocal opponent of Channel 4’s privatisation, is leaving to join Superstruct, a private equity-owned live entertainment company.
The appointment of a new chair is expected to take place by the autumn, with the chosen candidate expected to lead the recruitment of Ms Mahon’s successor.
The Department for Culture, Media and Sport declined to comment on the recruitment process.
The owner of Brentford Football Club has clinched a deal to sell a minority stake in the Premier League side to new investors at a valuation of roughly £400m.
Sky News has learnt that an agreement that will involve current owner Matthew Benham offloading a chunk of his holding to Gary Lubner – the wealthy businessman who ran Autoglass-owner Belron – is expected to be announced as early as Tuesday.
Matthew Vaughn, the Hollywood film-maker whose credits include Layer Cake and Lock, Stock and Two Smoking Barrels, is also expected to invest in Brentford as part of the deal, The Athletic reported last month.
Further details of the transaction were unclear on Monday night, although one insider speculated that it could ultimately see as much as 25% of the club changing hands.
If confirmed, it would underline the continuing interest from wealthy investors in top-flight English clubs.
FA Cup winners Crystal Palace have seen a minority stake being bought by Woody Johnson, the New York Jets-owner, in the last few weeks, with that deal hastened by the implications of former shareholder John Textor’s simultaneous ownership of a stake in French club Lyon.
Sky News revealed in February 2024 that Mr Benham had hired bankers at Rothschild to market a stake in Brentford.
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Under Mr Benham’s stewardship, it has enjoyed one of the most successful transformations in English football, rising from the lower divisions to the top division in 2021.
It has also moved from its long-standing Griffin Park home to a new stadium near Kew Bridge.
This summer is proving to be one of transition, with manager Thomas Frank joining Tottenham Hotspur and striker Bryan Mbeumo the subject of persistent interest from Manchester United.
Brentford did not respond to a request for comment on Monday night, while a spokesman for Mr Lubner declined to comment.