Summary

  • Chancellor Kwasi Kwarteng says the government will stick to its plan to try to boost the UK economy

  • He says it will also help people with their energy bills, despite widespread criticism of Friday's mini-budget

  • In a message to Conservative MPs, he calls for their support and tries to reassure them of the government's approach

  • Prime Minister Liz Truss earlier defended the mini-budget in a series of BBC local radio interviews

  • Despite days of market turmoil, she said cutting taxes and increasing borrowing was right

  • The pound slumped in value following Friday's announcements and the Bank of England pledged to buy billions of pounds worth of government debt in the form of bonds

  • Ex-Bank of England governor Mark Carney accused the government of working at cross-purposes with the Bank

  • There are fears inflation and interest rates could rise faster than predicted

Live Reporting

Edited by Claire Heald

  1. Why did the Bank of England intervene?

    An external view of the Bank of EnglansPA Media

    The tax cuts in Friday's mini-budget - and the borrowing that will fund them - shook the confidence of the markets in the British economy.

    That led to a significant fall in the value of UK government bonds, a type of investment where you loan money to the government in return for a rate of interest.

    Pension funds hold a lot of government bonds because they are normally a very stable investment, but the fall in their value led to concerns the funds would have to begin selling assets - such as bonds and stock markets shares - to pay their creditors.

    If that happened, it could have sparked a vicious cycle in which the sale of bonds pushes the price further down and triggers more sell-offs.

    The Bank of England's intervention was a pledge to buy £65bn worth of bonds over the next 13 days, propping up the price of bonds and preventing that cycle getting under way.

  2. Re-cap: What happened on Wednesday?

    Wednesday was another extraordinary day of turbulence for the UK's financial system. Here's a quick round-up of the key events:

    • The Bank of England was forced to step in to calm the markets, announcing a £65bn package to buy up government bonds
    • The recent turmoil had driven up the government's borrowing costs and put massive pressure on pension funds, which invest in government bonds because they are usually so stable
    • The Bank warned that the crisis presented a "material risk to UK financial stability"
    • The value of the pound remained very volatile over the course of the day, but rallied against the US dollar following the Bank's announcement
    • Treasury minister Andrew Griffith insisted the government's tax cuts were the "right plan for economic growth" and denied they were responsible for the turmoil, saying every major economy had been hit by the fallout from the war in Ukraine
    • The government is preparing plans for major cost-cutting across departments to help balance the budget, the BBC has been told

  3. Welcome

    Welcome to our live coverage of the ongoing reaction and fallout following the government's tax-cutting mini-budget last week.

    Prime Minister Liz Truss is expected to sit down for a series of long-planned broadcast interviews starting from around 08:00 BST, her first public comments in days.

    It comes after the Bank of England announced a £65bn bailout on Wednesday to help "restore orderly market conditions".

    We'll be bringing you all the latest throughout the day.