Sir Keir Starmer has called for a recall of parliament to discuss the financial market turmoil following Friday’s mini-budget.
Speaking to reporters, the Labour leader said the move by the Bank of England to launch a temporary bond-buying programme to prevent “material risk” to UK financial stability was “very serious”.
Politics Hub: ‘Growing movement’ for chancellor to quit
Sir Keir said: “I think many people will now be extremely worried about their mortgage, about prices going up, and now about their pensions.
“The government has clearly lost control of the economy.
“What the government needs to do now is recall parliament and abandon this budget before any more damage is done.”
Parliament is in recess because of the Labour and Tory party conferences, and the decision for a recall lies with Prime Minister Liz Truss.
PM under pressure after Bank’s extraordinary move
The PM been facing international pressure to change course after Friday’s budget sent the pound crashing to record lows against the dollar and triggered mortgage lenders to withdraw their offers.
Then, in an extraordinary move today, the Bank of England took emergency action to prop up the economy.
It revealed that it would buy as many long-dated government bonds as needed between now and 14 October in a bid to stabilise financial markets.
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In addition to the plunge in the value of the pound, it has also seen investors demand a greater rate of return for UK government bonds – essentially IOUs.
That is because the level of borrowing required to fund the government giveaway, including tax cuts and energy aid for households and businesses, shocked the market, which immediately questioned the sustainability of public finances.
The Lib Dems and SNP have also demanded a recall of parliament, while a growing number of Tory MPs have been criticising the government’s economic plans.
Read more:
Ed Conway on the Bank’s extraordinary response
IMF warns UK mini-budget will ‘likely increase inequality’
‘Inept madness can’t go on’
Simon Hoare, Tory MP for North Dorset and chair of the Northern Ireland Select Committee, said: “In the words of Norman Lamont on Black Wednesday: ‘Today has been a very difficult day’.
“These are not circumstances beyond the control of Govt/Treasury. They were authored there. This inept madness cannot go on.”
Meanwhile, a former minister told Sky News that there is a “growing movement” for Chancellor Kwasi Kwarteng to step down.
“The mainstream majority think we have crossed the Rubicon,” they said.
But another former minister tried to pour water on the flames.
They said: “It is inevitable the markets would react to a changing direction in economic policy. They will settle.”
Mr Kwarteng held a meeting with investment bankers this morning to try to reassure them.
He said he was committed to “fiscal discipline”, and that he was working closely with the Bank’s governor and the Office for Budget Responsibility.