Prime Minister Liz Truss today accepted she blundered by not preparing the markets for the big uncosted tax cuts in Kwasi Kwarteng’s mini-budget.

Ms Truss said she “accepted that the government should have “laid the ground better” and that she had learned from the failure to do so.

Markets went into freefall after the Chancellor announced £45bn of income tax cuts, including the scrapping of the top rate of tax, without detailing how they would be paid for. The Bank of England was forced into the bond market to prop up a plunging pound which hit a record low.

The market turmoil also led to a fall in support for the Prime Minister and the Conservative Party with a YouGov poll showing Labour had opened up a 33 point lead.

Asked by the BBC’s Laura Kuenssberg about the tax cuts plan, Ms Truss admitted that the decision to axe the top rate of tax was Mr Kwarteng’s and that it had not been shared with other members of the Cabinet before his statement on 23 September.

She said: “I want to reassure people that we do have a very clear plan. But I do understand their worries about what has happened this week.

“I stand by the package we announced and that we acted quickly… but I do accept we should have laid the ground better. I have learned from that and I will make sure that in future we do a better job of laying the ground.”

She said the government is trying to avoid a serious economic slowdown, but avoided saying there would be cuts in public spending, instead saying she was seeking “value for money”.

She insisted the programme she is working on “will deliver on the promises we made”.

The PM said the independent Office for Budget Responsibility (OBR), which assesses government spending plans, would not have been ready to produce its forecasts alongside the mini-budget.

However, that is not what the OBR says. It offered to produce a draft forecast to the Chancellor before his statement, but this was declined.

She shrugged off a report that Mr Kwarteng attended a drinks do with City traders immediately after the Budget, joking that she did not manage his diary. 

Tory chairman Jake Berry told Sky’s Sophy Ridge: “I can categorically rule out that in terms of his address he made to the group of people who were there – part of this normal treasurer’s event – he did not give any insights into future plans.

“And I’m sure in terms of his private conversations, he didn’t give any insight.”

Mr Berry added the gathering was not a get-together for hedge fund managers, but rather a reception for “Britain’s leading entrepreneurs”.

Ms Truss will offer a further defence of her policies when she addresses the party at its annual conference in Birmingham on Wednesday. The Chancellor will address delegates on Monday.

Former Cabinet minister Michael Gove hinted that he would not be voting for Ms Truss’s plan.

“I don’t believe it’s right,” he said.

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