The government is set to raise corporation tax despite promising not to do so in the mini-budget, Sky News understands.

The prime minister had vowed to scrap the planned tax rise from 19% to 25% next April, a key policy of her pro-business growth plan, during the Conservative leadership campaign.

The change in direction is the second major tax cut U-turn after the government confirmed it would not go ahead with a plan to scrap the 45p top rate of tax.

Kwasi Kwarteng, the chancellor, cut short his trip to the International Monetary Fund in Washington DC and returned to the UK on Friday morning as expectations of another significant U-turn mounted.

The mini-budget unleashed chaos in the markets and pushed the pound to a record low against the dollar when it was announced by Mr Kwarteng on 23 September.

The reversal follows warnings from the Institute for Fiscal Studies, a leading economics think tank, that Mr Kwarteng’s £45bn package of unfunded tax cuts had left a £62bn black hole in the public finances.

The government has come under increasing pressure from senior Tories to take steps to reverse aspects of the mini-budget to allay market concerns.