The Chancellor expected a U-turn on scrapping the 45p tax rate

Chancellor Kwasi Kwarteng is expected to make an abrupt about-face in abolishing the top tax rate for the highest earners.

Mr Kwarteng had planned to insist at the Conservative Conference in Birmingham that his party “stayed the course” and backed his plan for tax cuts, but a statement is now expected on Monday morning ahead of his appearance on the radio broadcast.

The Sun newspaper had previously reported that Prime Minister Liz Truss was preparing to drop the plans after talks with Mr Kwarteng.

The Chancellor’s mini-budget sparked uproar in the city, drew criticism from the International Monetary Fund and prompted a £65 billion emergency intervention by the Bank of England to restore order.

Former Cabinet ministers Michael Gove and Grant Shapps targeted the plan to cut income tax for people earning more than £150,000 at a time when millions are straining their family finances.

Asked about the possible turnaround on BBC Radio 4’s Today programme, Alasdair Locke, leader of the Motor Fuel Group and Conservative Party donor, said: “I think it would be unfortunate to be thrown off course by some kind of quite sensational media.

“The presentation was very poor, but it’s a step in the right direction and, in general, when you’re faced with an economic downturn, if not a recession, it seems pretty obvious to me to lower taxes rather than raise taxes. The 40% to 45% rate is a little distracting. It doesn’t make much money.”

He said such a change was “very minor” compared to the overall package envisaged by the government.

And he said the direction of creating an environment that’s “good for business” is “completely right.”

But he warned: “I think we should be careful as a party and as a government that our actions are dictated by short-termism, media reactions and market reactions, which are not necessarily rational.”