LONDON (Reuters) – British Prime Minister Liz Truss is rethinking tax-cut plans that sent markets into turmoil with a possible U-turn on business levies, media reported on Thursday, although her office said there would be no change of course.

Truss is under pressure to change tack on an economic package that has roiled markets, with some investors and her own lawmakers calling on her to reverse a plan for 43 billion pounds ($48 billion) of unfunded tax cuts, including scrapping an increase in corporation tax from 19% to 25%.

Following is a snapshot of related events, comments and explanations:

MARKET REACTION

* The pound surged along with UK stocks, while the government’s borrowing costs fell on Thursday after the reports that Truss is discussing making changes to her fiscal plan.

MAJOR PLAYERS

* Truss is considering raising corporation tax next year, in a reversal to the mini-budget, the political editor of the Sun newspaper said on Thursday.

* “The position has not changed”, Truss’ spokesperson said when asked if she stood by her promise of no further U-turns.

* Foreign minister Cleverly said changing Britain’s leader would be a “disastrously bad idea”, as he defended Truss from critics in the governing Conservative Party.

* Bank of England Governor Andrew Bailey told pension funds this week they had three days to fix liquidity problems before the bank withdrew emergency bond-buying support.

* Some investors suspect, however, that the need to avoid further turmoil will prevail and the BoE will continue to buy bonds, even if not immediately after Friday’s deadline.

WHAT’S BEHIND THE CRISIS?

* The Bank of England has been forced into emergency bond-buying to stem a sharp sell-off in Britain’s 2.1 trillion pound ($2.3 trillion) government bond market that threatens to wreak havoc in the pension industry and increase recession risks.

* The sell-off began after finance minister Kwasi Kwarteng’s tax-cut announcement.

* The BoE interventions have highlighted a growing segment of Britain’s pensions sector – liability-driven investment.

* LDI helps pension funds use derivatives to “match” assets and liabilities to avert risks of shortfalls in payouts, but the soaring interest rates have triggered emergency collateral calls for those funds to cover the derivatives.

UK government bond yields surge https://graphics.reuters.com/GLOBAL-THEMES/lbvgnqdxapq/chart.png

(Compiled by Toby Chopra)