Jeremy Hunt has signalled the end of Liz Truss’s failed economic experiment as he admitted taxes will rise to balance the government’s books.
The new chancellor also confirmed that spending cuts are on the way - despite the prime minister ruling them out just days ago.
Hunt’s comments came just a day after he replaced Kwasi Kwarteng as head of the Treasury.
The PM’s economic philosophy - dubbed ‘Trussonomics’ - was based on a clear pledge to cut taxes.
But in a major humiliation, Truss has already been forced to U-turn on the abolition of the 45p tax rate for the highest earners, and ditch a plan to freeze corporation tax at 19p.
Confirming more tax hikes are on the way, Hunt told Sky News: “Spending will not go up as much as people want and there’ll be more efficiencies to find and we won’t have the speed of tax cuts we’re hoping for, and some taxes will have to go up.
“That’s the reality of the very challenging situation we face.“
His remarks will pile fresh pressure on Truss, who is battling to save her job less than six weeks since taking over from Boris Johnson.
Tory MPs are openly plotting her downfall, with some predicting she may only have days left in Number 10.
Hunt was appointed yesterday following Kwarteng’s shock sacking by the prime minister.
The move, alongside the corporation tax U-turn, was designed to reassure the money markets that the government is serious about bringing spending under control.
The UK economy was thrown into chaos in the wake of last month’s mini-budget, which included £45 billion-worth of unfunded tax cuts.
n a hastily-arranged press conference yesterday, Truss admitted that the radical proposals “went further and faster than markets were expecting”.
Hunt said: “It was a mistake when we’re going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest.
“It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up.
“The prime minister.’ recognised that, that’s why I’m here.”