The pound touched an all-time low of US$1.0327 on Monday, British government bonds sold off at a ferocious pace and some mortgage providers, unable to price loans, suspended sales to new customers.

“The first step in regaining credibility is not saying incredible things,” Summers said on Twitter today.

Summers pointed to surging interest rates of long-dated British debt as a “hallmark of situations where credibility has been lost”.

“This happens most frequently in developing countries but happened with early Mitterrand before a U-turn, in the late Carter Administration before Volcker and with Lafontaine in Germany.”

On Monday the Bank of England and Treasury released statements in the hope of reassuring investors, with the central bank saying it would not hesitate to raise interest rates if needed.

Kwarteng also said he would set out medium-term debt-cutting plans on Nov 23, alongside forecasts from the independent office for budget responsibility showing the full scale of government borrowing.

Economist Allan Monks from America’s largest bank JP Morgan, said this intervention was “measured”.

“But there is still no clear sign that the source of the problem – the government’s fiscal strategy – is being reversed or reconsidered,” Monks said.

“This will need to happen before November in order to avoid a much worse outcome for the economy.