Kwasi Kwarteng set to be sacked as chancellor by Prime Minister Liz Truss

Kwasi Kwarteng will be sacked as chancellor as Liz Truss tries to restore her political authority ahead of a U-turn on parts of her disastrous mini-budget later on Friday, according to sources.

A Downing Street source confirmed to the Report Focus News  the prime minister intended to get Kwarteng to “carry the can” over her climbdown as she sought to calm the markets and the nerves of jittery Tory MPs.

The chancellor is due to meet the prime minister shortly, with discussions under way in No 10 and No 11 before a public statement.

The government has been left with little choice but to abandon its plans after the markets priced in a reversal of its position, with sterling responding positively to a series of leaks.

Kwarteng flew back early from Washington overnight. The government is expected to announce plans to increase corporation tax later this afternoon, with the prime minister potentially making a public statement.

One government source said that corporation tax was likely to rise but said it could still be less than the 25 per cent that was planned by the previous government. Other measures in the mini-budget could soon be reversed.

The government is acting to restore market confidence after Kwarteng used his mini-budget to announce £45 billion worth of unfunded tax cuts.

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