Truss premiership ‘hanging by thread’ after Kwarteng sacking and latest U-turn

Liz Truss is desperately clinging to her premiership after she sacked her chancellor and ripped up the mini-budget but failed to calm the financial markets or furious Conservative MPs.

In a humiliating reversal, the prime minister backed down on plans to scrap an £18bn rise in corporation tax and replaced Kwasi Kwarteng as chancellor with Jeremy Hunt.

She said staying in her position as prime minister would help to "reassure the markets of our financial discipline", but the cost of government borrowing rose and the pound fell following her press conference announcing the changes.

Senior Conservative MPs are plotting how to remove her from office, with some mulling whether to publicly call for her to resign in the coming days. One former cabinet minister said they thought it was "50/50 whether she will make it till Christmas", adding: "If I could wave a magic wand and get rid of her now then I would, but the problem is the mechanism."

Some Tory MPs thought the appointment of Hunt, a Tory centrist who has twice failed to win the leadership, could buy Truss some time, potentially as long as the further fiscal event on 31 October. In a sign that the former foreign secretary may be a powerful figure, one of his allies among Tory MPs, Steve Brine, told the BBC that people could regard "Truss as the chairman and Hunt as the chief executive" of the government.

Others said they regarded Truss as "finished" and it was a matter of time before she was ousted, particularly if there were a succession of further polls showing the Tories more than 30 points behind Labour - a situation that would lead to a landslide win for the opposition.

The former Tory leader William Hague told Channel 4 News it had been a "catastrophic episode" and while he was still hoping Truss could recover, it would be honest to say her premiership "hangs by a thread".