The Chancellor yesterday announced he would bring forward an announcement of a “medium-term fiscal plan” to start bringing down debt levels following an adverse reaction to his £45 billion package of tax cuts set out on Friday.

It was also revealed that the Treasury will set out a new budget in the spring.

Meanwhile, the Bank of England said it “will not hesitate” to raise interest rates to prop up the value of sterling after a day of turmoil on the markets.

A man walks past the Bank of England in the city of London after sterling hit its lowest level against the dollar since decimalisation in 1971. The pound fell by more than 4 percent to just 1.03 dollars in early Asia trading before rebounding to 1.09 dollars on Monday afternoon as speculation mounted over an intervention by the Bank of England, with officials there understood to be considering making an emergency statement this afternoon. Picture date: Monday September 26, 2022. PA Photo. See PA story POLITICS BUdget. Photo credit should read: Yui Mok/PA Wire

Yesterday saw the pound slump to its lowest level for at least half a century.

The Treasury said it would publish its fiscal plan on November 23, having previously been slated for the new year, and will include further details on the Government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium term.

At the same time the Office for Budget Responsibility will publish its updated forecasts for the current calendar amid widespread criticism that there was no update when Mr Kwarteng set out his “plan for growth” last week.

Bank of England Governor Andrew Bailey welcomed the Chancellor’s commitment to “sustainable economic growth” as well as the promise to involve the OBR.

He said the Bank’s monetary policy committee, which sets interest rates, will make a full assessment of the impact on inflation and the fall in sterling, at its next scheduled meeting in November and then “act accordingly”.

“The MPC will not hesitate to change interest rates by as much as needed to return inflation to the 2% target sustainably in the medium term, in line with its remit,” he said in a statement.

The move will be seen as an attempt to reassure the markets which were spooked by Mr Kwarteng’s unexpectedly large plans for tax cuts funded by a massive expansion in Government borrowing.

Those concerns were only heightened by comments at the weekend by Mr Kwarteng suggesting that there were further tax cuts on the way.

At one point, it was thought that the Bank of England would be forced to step in with an emergency interest rate hike amid fears the pound could drop to parity with the dollar.

Some analysts warned that the statements from the Bank and the Treasury were “too little, too late”.

However, some Conservatives said that the events since the fiscal statement by the Chancellor were nothing to worry about.

Tory peer Lord Frost described events since the mini Budget as “unwarranted” and an “over-reaction”.

He told BBC Radio 4’s PM programme: “Well I don’t think anything has gone wrong actually. Liz Truss promised change, a different economic approach to get us back to growth and away from stagnation and that means a number of things have got to happen.”

Rachel Reeves, Labour's shadow chancellor, said that people were “rightly worried about what these market movements mean for them and their families”.

"It is unprecedented and a damming indictment that the Bank of England has had to step in to reassure markets because of the irresponsible actions of the Government."

Chancellor forced to reassure markets as pound plummets