The prime minister’s plans for a pre-election tax cut to woo back voters were thrown into question after the International Monetary Fund (IMF) said the UK government could not afford them.
And in a deeply embarrassing development for Mr Sunak’s Brexiteer credentials, it emerged that the UK population is set to rise by another 6.6 million by 2036.
The Tory leader faced fresh calls from right-wingers to bring in a cap on overall numbers, as Office for National Statistics (ONS) figures showed the population could hit nearly 74 million by 2036.
The increase is starkly at odds with promises made during the 2016 EU referendum that Brexit would keep immigration down. According to the new projections, 90 per cent of the increase can be attributed to “net migration”.
Suella Braverman – the sacked home secretary, seen as a potential challenger to Mr Sunak – argued that record numbers were “placing pressure on schools, the NHS and housing”. The right-wing rebel dismissed Mr Sunak’s recent tightening of visa rules as too late.
Fellow hardliner Robert Jenrick, who quit as immigration minister over Mr Sunak’s “weak” Rwanda bill, joined Ms Braverman in demanding an overall cap. “This pace of change is far too fast,” he said.
It came as it emerged Ms Badenoch and Mr Gove are members of a Tory Whatsapp group called the “Evil Plotters”.
The business secretary is not believed to be pushing to replace Mr Sunak – but she is reportedly regularly holding lunches with key backers including housing minister Lee Rowley and digital minister Julia Lopez.
A spokesperson for Ms Badenoch did not deny the WhatsApp group claim, but said: “This is exactly the sort of stirring Kemi was referring to when she told people to stop messing around on Sunday.”
It has also been reported that Dougie Smith, a senior Tory strategist who has worked as an adviser to successive prime ministers, is aiding the group of rebels MPs and ex-advisers around Lord Frost who are actively plotting to oust Mr Sunak.
Mr Sunak’s hopes of calming anxious Tory MPs with tax cuts at the March budget were dealt a blow when the IMF warned that tax cuts would be “very challenging to achieve” considering Britain’s growing debt and ageing population.
Chancellor Jeremy Hunt dismissed the international body’s advice, arguing that “smart tax reductions” on 6 March would help grow Britain’s ailing economy.
The triple whammy deals a huge blow to Mr Sunak’s current objectives, as he fights to avoid the risk of a landslide election defeat sometime this year.
He and his No 10 had been pinning their hopes in silencing talk of a Tory leadership challenge by cutting income tax, alongside curbing immigration and stopping the boats with his Rwanda plan.
Mr Sunak told ITV’s This Morning on Tuesday that he is “absolutely confident” about the 2024 general election campaign, despite being 20 points behind Sir Keir Starmer’s Labour in the polls.
Elsewhere, a new Tory rift opened up over the Israel-Hamas war, after foreign secretary David Cameron suggested Britain could bring forward formal UK recognition of a Palestinian state.
The key Sunak ally suggested that Britain and others could formally recognise a Palestinian state during peace negotiations, rather than wait for a final peace deal with Israel.
No 10 insisted that there had been “no change” in UK policy. But it sparked a backlash among hardliners, with ex-Tory cabinet minister Theresa Villiers warning that it would only “reward Hamas’s atrocities” after the 7 October terror attack.
But senior Tory MP Alicia Kearns, the head of the foreign affairs committee, welcomed Lord Cameron’s remarks as a “fundamental change in the UK position”.
And leading Conservative Bob Seely – a member of the foreign affairs select committee – told The Independent that he welcomed Lord Cameron’s “constructive” idea.
Mr Sunak also faces the potential for fresh trouble over Brexit, despite the DUP’s decision to back a new agreement with No 10 on trade checks and restore powersharing in Northern Ireland.
Sir Jeffrey Donaldson tried to sell the deal to his party by arguing the agreement would involve “substantive” changes to trade arrangements, claiming they would mean “zero checks” on goods moving from Great Britain to Northern Ireland.
But Downing Street insisted the agreement would not need Mr Sunak to reopen his Windsor Framework deal with the EU.
No 10 played down the significance of a minor change agreed with Brussels expanding the category of “not at risk” goods entering Northern Ireland, insisting that it was “separate” to the changes agreed with the DUP that would be set out on Wednesday.
Brussels warned against any changes to the Windsor deal. “We expect the UK government to fulfil its obligations under the [Windsor] Framework,” said an EU Commission spokesperson.