Chancellor Kwasi Kwarteng has been defending his mini-budget in the Commons, on the day of a fresh intervention by the Bank of England
Meanwhile, the IMF has released a report suggesting the UK economic plan could increase growth but has inflation risks
And PM Liz Truss has insisted she's still committed to the "growth measures" in last month's mini-budget, despite the Bank's latest move
The Bank began an emergency plan to buy government debt after the "mini-budget" in late September - because investors were selling them off
The government's plan to fund tax cuts with large borrowing spooked markets, with the pound plunging
Many pension funds hold government bonds as they are traditionally seen as a very safe asset
Shadow chief secretary to the Treasury Pat McFadden asks how much more government borrowing will cost next year as a result of the mini-budget.
Financial Secretary to the Treasury Andrew Griffith responds: "We're seeing interest rates rise in every major economy.
"What's more important is that we are protecting households and consumers through the difficult winter ahead."
Labour MP Angela Eagle asks whether the government will first apologise for the "chaos of the mini-budget, with its £45bn of unfunded spending commitments and tax cuts".
"Isn't it now a fact that there is a Tory premium on every interest rent rise, on every borrower in this country? And they're not going to forget it when the election comes," she says.
Conservative MP Andrew Griffith responds for the government, saying there is "a clear divide in this house, between our side, which is supporting growth, providing support for energy bills, giving the economy the confidence and certainty that it needs this winter."
He says he is on the side of "boosting the economy" and not on "the side of striking workers bringing this economy to a halt."
Liberal Democrat MP Sarah Olney accuses the government's "failed mini-budget" of sending interest rates "soaring," but says that high streets are also threatened too, with small and medium-sized businesses suffering.
"What is the chancellor doing?" she asks.
Kwasi Kwarteng responds that the government's energy support package will help "every business", including those in Olney's constituency.
He adds that he'd be "very interested" to see the Lib Dems' plan.
The chancellor first faces a series of questions on the government's support for small businesses.
He speaks about what the government is doing, including helping businesses with energy costs.
He says he's "very proud" of the energy price guarantee, worth £30bn in the first six months - which is set to help both households and business-owners.
The Chancellor Kwasi Kwarteng is on his feet in the House of Commons, ready to answer questions at a routine session of Treasury Questions.
Stay with us as we keep you posted on what he says.
Here's a quick round-up of all the latest news on the UK economy.
More now on the latest economic warnings from the International Monetary Fund (IMF).
Today's report makes mixed reading for the UK government.
The IMF expects only Germany and Italy will see weaker growth next year than the UK among the world's advanced economies.
Image source, ."Growth is forecast at 3.6 percent in 2022 and 0.3 percent in 2023 as high inflation reduces purchasing power and tighter monetary policy takes a toll on consumer spending and business investment," it says.
However, this forecast was prepared before Chancellor Kwasi Kwarteng announced his mini-budget at the end of last month that spooked financial markets with its programme of tax cuts funded by borrowing.
On that, the IMF said: "The fiscal package is expected to lift growth somewhat above the forecast in the near term, while complicating the fight against inflation."
In the immediate wake of the mini-budget, the IMF criticised the government's proposals in an unusually outspoken statement warning that the measures were likely to fuel the cost-of-living crisis.
Lora Jones
Business reporter
Image source, ReutersThe International Monetary Fund has warned "the worst is yet to come" for the world economy as the war in Ukraine continues and prices spiral.
In its latest assessment of the global economy, it said "for many people 2023 will feel like a recession".
British growth is set to grind to a near halt next year, growing by 0.3%. That marks a 0.2% downgrade from the IMF's July forecast, and a sharp fall from the 3.6% rate of growth for the UK economy expected in 2022.
The analysis by the influential financial institution does not, however, take into account the chancellor's recent mini-budget, which the government says is intended to boost growth.
After Kwasi Kwarteng unveiled plans for huge tax cuts, the IMF criticised the proposals, warning that the measures were likely to fuel the cost-of-living crisis.
Speaking on Monday, IMF boss Kristalina Georgieva said the body would be pushing for major economies to carry on with their efforts to bring down the cost of living, even if they have a negative impact on economic growth.
If they don't do enough, she said, "we are in trouble. We cannot afford inflation to be a runaway train."
She added that, as well as the war in Ukraine, global growth was being dragged down by continued Covid restrictions in China, while in the US rising interest rates were "starting to bite".
Kevin Peachey
Personal finance correspondent
The news of recent hours and days may have made you worried about your pension - but some context is needed here.
The Bank of England is stepping in to deal with a particular issue facing pension funds which deal with defined benefit pensions, like final-salary pensions. Those pension schemes also have a safety net called the Pension Protection Fund.
The move has no impact on your state pension, which the government has committed to raising in line with prices next April.
In fact, if we take a further step back, the expectation of rising interest rates in the long-term can be good for pension funds, but only after they have got over this current turbulence.
The fallout from the government's "mini-budget" has sparked concern in a number of sectors - including the travel industry.
Mark Tanzer, chief executive of ABTA, which represents the UK's travel agents and tour operators, noted "the current turbulence in the financial markets... is a real cause of concern for our members".
He added that the combination of higher interest rates and rising energy meant businesses were facing the squeeze - "just when consumers are tightening their belts".
The problem was made even worse by the fact many businesses were still trying to cope with the effects of the pandemic, he said. According to ABTA's own research, overseas travel in the last 12 months had reached just 70% of the levels seen three years ago - before Covid.
Tanzer, who was speaking at ABTA's travel convention in Morocco, said increased borrowing at higher costs was simply not an option for many travel businesses.
Image source, PA MediaChancellor Kwasi Kwarteng yesterday brought forward the date on which he will detail his economic plans, including how he intends to cut debt.
He will now make his announcement on 31 October instead of 23 November. And, according to the Institute for Fiscal Studies (IFS), the chancellor has his work cut out for him.
In a new report today, the think tank warns that Kwarteng will have to cut spending by £60bn per year by 2026-27 to put the UK economy on a stable footing.
During his mini-budget last month, Kwarteng unveiled £45bn of tax cuts as well as a massive package to subsidise energy bills for households and business.
Kwarteng didn't spell out how he planned to pay for his tax cuts which, in part, is what spooked financial markets. The IFS says that if chancellor wants to pursue the plan, he will have to find huge savings elsewhere.
"It's hard to see what other way out the chancellor has," says IFS director Paul Johnson, who noted that the UK does not have "much fat to trim".
As you can see from the graph above, pound has fluctuated in value against the US dollar in recent weeks.
Sterling fell sharply after Chancellor Kwasi Kwarteng's mini-budget on 23 September, which spooked investors and raised doubts about the government's long-term ability to pay its debts.
It plunged to a record low of just over $1.03 on 26 September, before rallying after the Bank of England announced a £65bn bond-buying programme to calm market turbulence.
But it's slid again over the last week, and currently stands at around $1.10.
Faisal Islam
BBC Economics Editor in Washington DC
Image source, ReutersThere are questions about UK economic policy, especially after the Bank of England's second intervention in 24 hours
It's a very significant day for the UK economy.
We will hear from the chancellor in Parliament and this evening from Bank of England governor Andrew Bailey who is here in Washington DC at the International Monetary Fund (IMF) and World Bank annual meetings.
There are many questions arising internationally about British economic policy, especially after the Bank of England's second intervention in 24 hours and the third since the so-called mini-budget on 23 September.
The fundamental issue remains the same: markets are questioning whether the government can come up with a solution to its challenges that both adds up and is politically viable.
While the UK shares challenges common to other nations such as the energy shock and rising interest rates - which the IMF will detail in new forecasts due out this afternoon - a separate report by Institute for Fiscal Studies makes for sobering reading for Britain's chancellor.
It forecasts sluggish growth for five years, the highest interest rate bill for the government since 1950 and the third highest government borrowing since World War Two.
And the solution, if the government is to keep to its plan to slash taxes, will be £60bn of spending cuts. That all has to be worked out in less than three weeks by Halloween, when Kwasi Kwarteng announces his economic plan.
The Bank of England's intervened to smooth things over but it is not a solution.
Prime Minister Liz Truss remains committed to the economic plan set out in last month's mini-budget, despite today's fresh intervention by the Bank of England, Downing Street says.
Earlier, the Bank said it would expand its bond-buying programme. This was a further effort to shore up the price of government bonds, preventing a market sell-off that could affect pension funds and other investors.
Referring to last month's mini-budget, a Truss spokesman said the prime minister remained "confident that the measures set out will deliver growth in the economy".
Asked about the Bank's announcement, he added: "The additional measures announced today will support an orderly end to the Bank of England's intervention scheme."
He added that the intervention was not discussed at Tuesday morning's main cabinet meeting. "They talked about the growth plan and the importance of that," he said.
Iain Watson
Political correspondent
Image source, EPA-EFE/REX/ShutterstockLiz Truss faces difficult choices amidst a cost of living crisis
Conservative MPs return to Westminster today after a party conference which displayed their divisions.
Some will be nervous that the markets don't yet seem reconciled to Liz Truss and Kwasi Kwarteng’s approach to the economy.
The chancellor is bringing forward his economic plan from 23 November to 31 October. Its content will be far more important than its timing.
But if the markets are spooked by this Halloween statement, then the political outlook for the PM will worsen - and the pressure to demonstrate where the money is coming from for tax cuts will increase.
Truss will then face tough choices.
Despite a promise to provide bold leadership, the PM has already reversed her position on the 45p tax rate.
She is also being urged by many of her MPs to increase benefits in line with earnings not prices – costing perhaps £5bn a year.
Delaying or cutting infrastructure spending could make her aim of boosting growth more difficult, and face opposition from Tory MPs who won their seats from Labour with a promise to "level up".
There are no easy political solutions amid a cost of living crisis.
What does the government's cost of borrowing have to do with pension funds?
The government raises money for its spending by selling bonds (also known in the UK as gilts) to investors. These are basically a type of IOU, with the government promising to pay the money back, plus interest, within a given time frame – say over 10 years.
Pension funds invest billions of pounds of your money in government bonds.
Following Chancellor Kwasi Kwarteng's mini-budget, investors wanted a much higher return for investing in bonds.
In order to protect themselves against sharp rises in government borrowing costs, pension funds themselves invest in products which act as a kind of insurance.
Because of the sharp rise in the cost of borrowing following the mini-budget, the people who provide this insurance wanted a payment from the pension funds.
This forced pension funds to sell bonds to satisfy these requests.
As they sold bonds, the cost of government borrowing continued to rise - which led to more bond sales, creating a kind of "doom spiral".
At this point, the Bank of England stepped in to buy up bonds and bring the cost of borrowing down. That succeeded but only for a time, as the graphic above shows.
Hence this morning's fresh intervention from the Bank.
Image source, PA MediaSome more now from Therese Coffey.
The deputy prime minister has insisted the government has a "plan for growth" in response to questions about how the government will balance its books.
As we reported earlier, the Institute for Fiscal Studies (IFS) think tank says the government will have to spend £60bn less per year by 2026-27 to put the nation's finances on a sustainable path.
Asked about the report on Sky News earlier, Coffey said the think tank "does its own modelling".
Pressed further about possible budget cuts to public services, she said she would not "get into hypotheticals”, and pointed to the chancellor's pledge to set out the government's economic plan at the end of this month.
Kevin Peachey
Personal finance correspondent
The Bank of England's immediate intervention was designed to calm markets but there is a longer-term picture.
Separately, it is still expected to raise interest rates, and that likelihood means fixed-rate mortgages have been getting more expensive.
As of today, the average two-year fixed rate deal for new borrowers has an interest rate of 6.43%, according to the financial information service Moneyfacts.
On the morning of the government's mini-budget on 23 September, the typical rate was 4.74%, and at the start of December 2021, it was 2.34%.
The cost of a fixed-rate mortgage is determined by the government's own borrowing costs.
If it gets more expensive for the government to borrow money on the markets - which has been the case since the chancellor's mini-budget last month - that means it's getting more expensive for your mortgage lender, too. That causes lenders to charge home-buyers higher interest rates for new loans.
When they borrow money, mortgage lenders have to pay interest a little higher than the government to compensate investors for the extra risk they're taking. That's because the government is regarded as the most reliable borrower - as a sovereign currency issuer, it can never "run out" of money.
So when the government’s cost of borrowing over two or five years rises, so does the cost of fixed-rate mortgages.
While borrowing costs came down a little this morning, they're nowhere near low enough to usher back in an era of cheaper mortgages seen before the government unveiled its mini-budget.
There's a glimmer of good news for the economy this morning after the unemployment rate fell to its lowest level for nearly 50 years.
The rate stands at 3.5%, according to the Office for National Statistics (ONS) - the lowest since 1974.
Image source, .But as we all know - it's one thing to have a job and another to earn the money you need to pay for everyday goods and services which have been rising and rising in price. Inflation - which measures the pace that prices rise - is at the highest level for decades.
And it's thought that the falling unemployment rate was partly caused by a large number of people leaving the labour market entirely, with long-term illnesses playing a major role.