Kwarteng leaves Washington early with another mini-budget u-turn on the cards

Kwasi Kwarteng is ending his trip to Washington a day early, flying back to London amid speculation that the government is planning another U-turn on its mini-budget.

The chancellor, who was due to meet counterparts today at the International Monetary Fund (IMF), confirmed he would head back to London overnight.

Treasury sources said Kwarteng was returning to London to work on a medium-term fiscal plan due on October 31. He had appeared at a British embassy reception after meetings with US and other officials at the IMF annual meeting.

Sources close to the chancellor last night said that he wanted to engage with government colleagues and MPs about medium-term fiscal planning. They stressed that his top priority was fiscal responsibility. They added that the IMF gathering showed that finance ministers across the world were all dealing with similar problems of inflation and interest rates, as well as the knock-on effects of the war in Ukraine.

They rejected comparisons to the last time a finance minister left unexpectedly early, when the Greek minister Evangelos Venizelos flew back in 2011 to deal with that country’s sovereign debt crisis.

The chancellor’s decision to cut his trip short comes after the pound and UK bonds rallied on speculation that he would reverse a decision to freeze corporation tax at 19 per cent. Earlier yesterday, he said “let’s see” when asked about the possibility of reinstating a planned increase to 25 per cent.

Officials could not recall a precedent for a chancellor flying back early from the IMF event for domestic reasons.

Kwarteng was due to have meetings in Washington this morning including attending plenary events with fellow finance ministers.

His sudden departure caused speculation that he needed to make urgent decisions about economic policy as the Bank of England prepared to end its emergency bond-buying scheme at the close of market business today. Kwarteng had been due to fly back as the markets closed tonight.

A spokesman for the Treasury said: “After completing a successful series of meetings at the IMF, the chancellor is returning to London today to continue work at pace on the medium-term fiscal plan.”

Kwarteng was said to be taking the last commercial flight out of Dulles airport.