Prime Minister Liz Truss has done another u-turn on the tax-slashing mini budget.

Speaking at a press conference this afternoon she confirmed the government will keep the previous government's plans to increase corporation tax.

Ms Truss said: "People across this country rightly want stability. We acted to support businesses and households with their energy costs this winter.

"It is clear parts of our mini budget went further and faster than markets were expecting. So the way we are delivering our mission right now has to change.

"We need to act now to reassure the markets of our fiscal discipline. I have therefore decided to keep the increasing corporation tax which was planned by the previous government.

"This will raise £18 billion per year. It will act as a down payment on our full medium term fiscal plan which will be accompanied by a forecast from the OBR.

"We will do what ever is necessary to ensure debt is falling as a share of the economy in the medium term."

Corporation tax will now go from 19p in the £1 to 25p in April.

The announcement came hours after Kwasi Kwarteng confirmed he had been sacked as the Chancellor of the Exchequer after having to return early from International Monetary Fund talks in Washington.

Shortly after, his replacement was confirmed as Jeremy Hunt.

In his letter, Mr Kwarteng said: "You have asked me to stand aside as your Chancellor. I have accepted.

“When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.

“The economic environment has changed rapidly since we set out the Growth Plan on 23 September. It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.”

The sacking of Kwasi Kwarteng as Chancellor will lay the ground for The Prime Minister to set out further changes to the government’s growth strategy.

She will hope that any u-turn will buy her time to restore her credibility and be evidence that she can act decisively.

But the political storm clouds continue to cast a shadow over Downing Street and MPs may not be convinced that the PM has done enough to consolidate her position.

Bringing in Jeremy Hunt will also show that she is willing to include in her government those that did not support her during the leadership contest.

There are already claims that disgruntled MPs have begun to send in letters of no confidence andreports that a rule that prevents any leader from a challenge for a year could be changed by the 1922 committee.