Liz Truss may raise corporation tax in further budget U-turn

theguardian.com:

Liz Truss is on the cusp of putting up corporation tax as part of a Downing Street plan to back down from the huge package of unfunded tax cuts in her mini-budget, sources claim.

The prime minister has been under intense pressure from jittery Conservative MPs to stage a major economic U-turn to calm the markets in the face of a financial storm.

However, the move would represent a massive climbdown as her promise to cancel Rishi Sunak’s plans to put up corporation tax from 19% to 25% was a central pledge of her leadership campaign.

One government source told the Guardian that No 10 officials were reviewing the mini-budget in order to shore up Truss’s premiership after Kwasi Kwarteng’s disastrous economic growth plan last month.

Another source suggested that the option of raising corporation tax was “on the table” as the prime minister tries to balance the books – although this may be by just one or two per cent.

They indicated that no decision would be announced until the chancellor had returned from Washington, where he is at a meeting of the International Monetary Fund, on Friday. However, there was speculation on Whitehall that the scale of the U-turn could make it impossible for Kwarteng to continue in post.

Earlier on Thursday morning, No 10 ruled out further changes to the mini-budget despite the pressure from Tory MPs with the prime minister’s official spokesman saying “the position has not changed”.

Both UK government bonds and the pound rallied strongly, in part due to continued bond-buying by the Bank of England, but also in response to the speculation about a reverse on planned cuts to corporation and dividend taxes.

At prime minister’s questions on Wednesday, Truss ruled out any corporation tax hike, telling MPs: “I