BlackRock Inc.'s chief macroeconomic strategist, Rupert Harrison, said the U.K. government must backtrack on its budget plans to prevent turmoil in financial markets from spreading.

“It does seem pretty clear that the government is preparing a U-turn on at least a very big chunk, if not half, the permanent tax cuts in the budget,” Harrison said in a Bloomberg Television interview on Friday. “And if we don't get that, then the markets will react very negatively.”

The comment indicates the scale of pressure on Prime Minister Liz Truss's administration after the pound and government bonds plunged following a set of unfunded tax cuts set out by UK.. Chancellor of the Exchequer Kwasi Kwarteng on Sept. 23.

Truss plans a press conference later Friday to disucss the economy, and Kwarteng arrived in London this morning after cutting short his trip to the International Monetary Fund's autumn meetings in Washington.

Yields on 30-year U.K. government gilts fell by 40 basis points on Thursday morning after reports that the Treasury would back down on its program. Harrison said a U-turn would be a “wise move” both poltitically and economically. 

“Given the situation they are in, acting early to stem the bleeding of markets, regain some stability, definitely buys them some time, and I think that's the best they can hope for at the moment,” Harrison said.

The plunge in bond prices has pushed up interest rates in financial markets, which is raising the cost of mortgages for homeowners. Former Bank of England policymaker Andrew Sentance said on Bloomberg TV he expects a further interest rate increase of as much as full percentage point next month.

“We've still got quite a serious problem with inflation,” Sentance said. “It may still go higher depending how the energy price package introduced by the government kicks in. We may see second round effects and a continued above target inflation for quite some time.”