LIZ Truss’s own external economics adviser has insisted he warned her and the Chancellor about the risks of their mini-budget after Kwasi Kwarteng claimed he had not.

Speaking to BBC Radio 4 on Monday, Kwarteng said he could not “remember” being warned by economist Gerard Lyons that the financial markets would not tolerate unfunded tax cuts.

Asked about the Chancellor’s claim, Lyons said: “Well that’s incorrect. I was very clear.”

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The £45 billion tax-cutting package announced by Kwarteng on September 23 triggered turmoil in the City, sending the pound plummeting to historic lows and the cost of Government borrowing and mortgage rates soaring.

The most controversial measure was the scrapping of the top rate of income tax for the highest earners, a plan Truss and Kwarteng have now abandoned in a dramatic U-turn.

Asked if he was pleased about the U-turn on axing the 45% rate on earnings over £150,000, Lyons said: “I have no view on the U-turn.

“I was critical of that immediately after the mini-statement and said so publicly on the record, but it’s up to them what they do in terms of U-turns.”

Lyons, chief economic strategist at Netwealth who suggested that Brexit would mean people "suddenly face cheaper prices for food", previously said the Chancellor “overstepped the mark” with his mini-budget and failed to adequately prepare the markets ahead of his announcement.

The spat adds to the pressure Kwarteng is under in the wake of the humiliating U-turn coming a little over a week after the tax cut was announced in the mini-budget and just a month into Truss’s premiership.