Kwasi Kwarteng reportedly attended a private champagne reception with hedge fund managers at the home of a Conservative donor on the same day he delivered his mini-budget.
The chancellor is alleged to have given guests information about forthcoming government spending cuts during the event at the west London home of Andrew Law, a financier, on the evening of Friday 23 September.
Kwarteng’s mini-budget earlier in the day, which introduced a £45bn package of tax cuts that will mostly benefit the richest fifth of households, triggered economic turmoil – with sterling collapsing to its lowest level since 1985 and the Bank of England acting to save pension funds.
The Labour leader, Keir Starmer, has called for the recall of parliament to address the financial crisis.
The chancellor is said to have told attenders at the reception of austerity-style budget cuts to come while guests drank wine, champagne and cocktails as they congratulated him on the measures announced in the House of Commons, according to the Sunday Times.
A source told the newspaper: “He wanted to give an unadulterated message of ‘growth, growth, growth’ and that’s why he didn’t talk about savings, because otherwise the [news] agenda would have been all about savings – ‘where will you cut? What will you cut? Blah blah blah’ – they’re fully aware they have to make savings.”
Two sources said Kwarteng described that day as a “great day for freedom”.
Another said guests told Kwarteng to “double down” – an approach from which some stood to make profits.
Tory officials told the Sunday Times that Kwarteng attended the gathering at Law’s home, which was arranged by the Conservative party’s campaign headquarters, for an hour to talk through his mini-budget plans and gave a five-minute speech.
The Liberal Democrat Treasury spokeswoman, Sarah Olney, said: “While struggling homeowners saw their mortgage bills spiral, it seems the chancellor was sipping champagne with hedge fund managers profiting from the falling pound.
“How out of touch can you get? We need an official inquiry into this now.”
A source close to the chancellor said: “Any suggestion attendees had access to privileged information is total nonsense.
“The growth plan [published earlier that day] included a commitment to review our tax code to make it simpler, better for families and more pro-growth. The government’s ambitions on lowering the tax burden are hardly a state secret.”
Kwarteng has said he will set out further details of his economic strategy when he publishes his medium-term fiscal plan on 23 November.
But the Treasury select committee, made up of MPs from all parties, has demanded that the chancellor release a full economic forecast from the Office for Budget Responsibility by the end of October.
The Treasury has been approached for comment.