City investors are bracing for a week of renewed choppy trading in UK financial markets as Liz Truss’s government attempts to regain control and the Bank of England steps back from its emergency intervention. Before markets reopen for the first time since the Bank halted its multibillion-pound support programme on Friday, analysts said renewed turbulence on Monday despite Kwasi Kwarteng’s sacking as chancellor could not be ruled out. “It has been such a volatile time. We can’t expect plain sailing from here regardless of all the changes made,” said Sarah Coles, senior personal finance analyst at Hargreaves Lansdown. Government ministers and the central bank are expected to keep a close eye on the government bond market and the pound to see if installing Jeremy Hunt as chancellor and a screeching U-turn on corporation tax can placate jittery investors. Sterling fell sharply against the US dollar on Friday, in the initial aftermath of those decisions, to trade below $1.12 on global currency markets, while UK government borrowing costs rose. “All the work Jeremy Hunt is doing on the media rounds was designed to calm the markets. And there has been a lot of talk from the Bank about being prepared to raise rates significantly,” said Coles. “They’re making all the noises the market should be able to interpret for calmer times ahead, and allaying fears for unfunded borrowing. “However, there’s plenty more in the bag that, if market aren’t calmed, the government will have to look at,” she added, referring to potential further U-turns on tax promises. Hunt, who failed in a pitch to become Conservative party leader this summer, spent his first weekend as chancellor attempting to ease concerns in financial markets over the government’s tax and spending plans. Suggesting tax rises and spending cuts were on the horizon, he warned that “difficult decisions” would be required in the new budget on 31 October. The chair of Tesco, John Allan, said he was “encouraged” by the new chancellor’s promise for a focus on economic growth underpinned by sound public finances. However, he said the Labour party’s proposals were more “plausible” and “attractive”. “Frankly, I don’t think we’ve seen a growth plan from the Conservatives. I hope we will. We have seen the beginnings, I think, of quite a plausible growth plan from Labour,” he told BBC One’s Sunday with Laura Kuenssberg programme. The government’s cost of borrowing has risen in recent days in advance of the end of the Bank of England’s £65bn emergency bond-buying programme last Friday. Threadneedle Street stepped in to preserve the stability of the UK financial system as pension funds came under severe stress after the mini-budget. However, the government could still be forced to take further action to calm financial market concerns. Sanjay Raja, senior economist at Deutsche Bank, said: “Could we see other U-turns? Almost certainly.”