It is not a typical message delivered to a Conservative chancellor by their advisers.

Jeremy Hunt’s new economic adviser has told him that using tax cuts as a “quick fix” to boost growth will not work.

Anna Valero has instead told him to widen the scope of his new business investment stimulus to boost the economy ahead of the next general election, after a bruising night for the Tories in local elections across England.

5 things to start your day 

1) US bank shares plunge as PacWest fuels crisis fears | Instability spreads as UK households pull record amount of deposits from lenders

2) Apple suffers back-to-back sales slump in cost of living squeeze | It comes as the iPhone-maker gears up for a push into virtual reality

3) City watchdog set to slash fines in bid to speed up investigations | Plan to incentivise early settlement comes after backlash against lengthy cases

4) Higher taxes under Labour will harm green investment, warns Shell boss | Comment comes as leaders call for higher windfall taxes on energy companies

5) Lawyers to use ChatGPT AI rival to draft legal documents | Top firms including Baker McKenzie to trial Lexis+ chatbot

What happened overnight 

Asian stocks rose, the dollar eased and gold hovered near record highs as investors worried that a rout in shares of US regional lenders earlier this week could herald more trouble for the banking sector.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.4pc higher and was on course to snap its two-week losing streak as investors bet that the Federal Reserve may soon have to cut interest rates.

China shares fell 0.7pc, while Hong Kong’s Hang Seng index was up 0.6pc.

As investors flocked to safe haven assets, spot gold moved closer to its record high and the yen appeared set for its first weekly gain in nearly a month.

It comes after Wall Street stocks dropped Thursday following another brutal sell-off in regional banking shares, in the wake of four bank failures since early March.

Shares of PacWest Bancorp slumped 50.6pc, First Horizon plunged 33.6pc and Western Alliance Bancorp dropped 38.5pc.

The Dow Jones Industrial Average fell 0.9pc to 33,127.74. The broad-based S&P 500 shed 0.7pc to 4,061.22, while the tech-rich Nasdaq Composite Index lost 0.5pc to 11,966.40. 

Thursday’s losses came after the European Central Bank followed the Federal Reserve in hiking interest rates a quarter-point.