Kwasi Kwarteng was warned that his disastrous mini-budget could trigger a backlash on the financial markets, Treasury officials have told MPs.
Permanent secretary James Bowler insisted on Monday that the then-chancellor was told about the potential impact of his £45 billion package of unfunded tax cuts.
But Mr Kwarteng went ahead with the spending spree in September, triggering the pound’s plunge, the soaring cost of government borrowing and chaos in the mortgage market.
Mr Bowler took over as the top civil servant in the Treasury in October after predecessor Sir Tom Scholar was abruptly sacked by Mr Kwarteng.
On Monday, Ms Russell told the Commons Treasury Committee: “Cat and I are confident that we gave all the advice to ministers on the economic and fiscal backdrop, the impacts and the market position and particularly around the financing requirement, which was a big issue because of the cost of the measures.”
Asked if there was more they could have done, she said: “Ultimately the decisions here are for the ministers.
“It’s our job to make sure we give the best advice possible on the impacts and the consequences, and I think we both feel we did that on the situation in the markets.”
Mr Bowler backed his colleagues, saying he is “absolutely confident Treasury officials set out the right advice to the chancellor”.
He conceded that they could not persuade Mr Kwarteng to take another route, saying “officials advise but ministers decide”.
Labour’s Dame Angela Eagle told him the mini-budget was a “self-inflicted catastrophe”.
“Your words,” Mr Bowler responded.
“It’s been a tough year for Treasury civil servants,” he said.
“There’s been a lot of crisis upon crisis, so Covid, Ukraine energy, so the mini-budget came on top of that.
“Political change, so four chancellors since the summer, and in some quarters negative commentary on Treasury civil servants, none of that has been helpful.
“In terms of morale I think that has had an impact but staff understand they’re working on really, really important areas.”
Mr Bowler started as permanent secretary on October 10 after Sir Tom was sacked on September 8, with his ousting being partly blamed for the financial crisis.
“I think Tom’s departure wasn’t normal,” Mr Bowler said.