By Geoffrey Smith 

Investing.com — The fell and U.K. government bonds extended their rally on Friday after reports that Prime Minister Liz Truss will fire Kwasi Kwarteng as Chancellor of the Exchequer and abandon most of their program of unfunded tax cuts.

Truss is due to hold a press conference at 08:00 ET (12:00 GMT), while Kwarteng has just arrived back in the U.K. after flying home early from the International Monetary Fund’s autumn meeting, where his plans were criticized by senior Fund officials.

Kwarteng subsequently confirmed the reports in a tweet that contained his resignation letter, which began “You have asked me to stand aside as your Chancellor. I have accepted.”

Reuters reported that Truss will name former Foreign Secretary and Health Secretary Jeremy Hunt to replace her long-time friend at No. 11 Downing Street.

By 07:25 ET, the pound was its low for the day at $1.1246, down 0.7% on the day. The yields on U.K. government bonds, meanwhile, continued to plummet, in anticipation that the government’s borrowing requirement will be scaled back under a new Chancellor, the fourth the U.K. will have had in as many months.

Bonds were also supported by a last day of interventions from the Bank of England, which will end its outright purchases of Gilts later Friday. The Bank had earmarked up to £65 billion for stabilizing the bond market after Kwarteng’s ill-fated ‘mini-budget’ in September triggered a rout in government bonds that assumed self-reinforcing dynamics as pension funds sold ever-larger quantities of Gilts to meet margin calls on derivatives.

The Bank had warned that disorderly conditions represented “a material threat to U.K. financial stability,” and pledged to restore order. However, it also announced that it will revert to repo operations from next week, aiming to avoid any further boost to the money supply at a time when is already running at nearly 10%.