Kevin Peachey
Personal finance correspondent

Markets, government bonds and Bank of England interventions may seem a world away from your own finances - but they do have an impact.

For example, if the cost to the government to borrow money rises then that affects its ability to deliver services (and indeed tax cuts) to all of us while trying to balance the books.

That brings spending cuts into the equation, hence the debate over the increase in benefits next year.

Of course, the government is prioritising growth, which would create a more buoyant economy.

Meanwhile, in the background, prices are still rising fast, in part owing to global factors. That is generally controlled by putting up interest rates, which makes borrowing, such as mortgages, more expensive. Savers may get better returns, but the buying power of those savings is being eaten away by rising prices.

A recession risk, a volatile pound, the Bank of England stepping in... the state of the economy and what it means for us can be very confusing.

Later today we'll have our personal finance expert on hand to answer your questions on what the market volatility sparked by the mini-budget means for you.

This is your chance to ask us anything to help you make sense of it – and no question is a silly question.

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Labour's Rachel Reeves has been granted an urgent question in the House of Commons on the state of the economy.

A Treasury minister will respond to Reeves after Prime Minister's Questions.

MPs on the treasury select committee are hearing from economic experts right now.

They asked them about comment's the business secretary made during this morning's round of interviews. Jacob Rees-Mogg denied the current economic turmoil was caused by his government's mini-budget.

Torsten Bell, chief executive at the Resolution Foundation, says it was very clear that there was a UK-specific element to what's happening in the global economy.

Bell says "look at the change over the last year, look at the change particularly since September" in government debts.

"Just focus on what the Bank of England is telling you," he adds.

Meanwhile, Deutsche Bank's chief UK economist Sanjay Raja says the events of 23 September, when Chancellor Kwasi Kwarteng announced his controversial tax cuts, were "the straw that broke the camel's back".

He adds that there is also a global component, which should not be glanced over as markets are very sensitive as fiscal policy and monetary policy in the UK are moving in different directions.

Image source, Reuters

Prime Minister Liz Truss has appointed an MP who backed her Tory leadership rival Rishi Sunak as her parliamentary private secretary.

Marcus Jones, who's the MP for Nuneaton, Arley and Hartshill, says he's "deeply honoured".

His appointment follows Greg Hands - another Sunak backer - being made trade minister earlier this week.

There has been unease among some Tory MPs over the government's direction and these posts could be an attempt by Truss to quell backbench unrest.

The announcement comes before she's due to face Labour's Sir Keir Starmer for PMQs at midday for the first time since September's mini-budget.

Andrew Verity
Economics correspondent

Traders have again been heavily selling UK government bonds this morning, forcing up the cost of borrowing over 30 years close to its peak in the wake of Kwasi Kwarteng's budget.

The effective interest rate for the government to borrow over 30 years, which rises when bond prices fall, was up sharply by more than a tenth to 4.92 per cent.

It suggests the Bank of England’s two interventions this week, on Monday and Tuesday, have failed to calm the market’s nerves.

Bond yields normally move in small steps of one or two hundredths of a percentage point (known as "basis points").

But this morning the yield on 30-year bonds was up by 11 basis points to 4.92 at 09:45.

That’s close its peak after the budget of 5.1% that prompted the Bank of England to intervene.

Amid conflicting reports about Bank of England intervention and whether it will be prolonged beyond Friday, traders remain concerned that investment managers for employers' pension schemes, hit hard by falling bond prices, are being forced to sell assets rapidly to beef up their finance, threatening financial stability.

The Bank of England confirms its emergency bond-buying scheme will close this Friday, in spite of reports that it was considering extending the programme.

A spokesman for the Bank says: "As the Bank has made clear from the outset, its temporary and targeted purchases of gilts [government bonds] will end on 14 October.

"The governor confirmed this position yesterday and it has been made absolutely clear in contact with the banks at senior levels."

It adds that other measures taken over recent days will be in place after 14 October "to ease liquidity pressures on LDIs (liability driven investments)".

Business Secretary Jacob Rees-Mogg has rejected claims that Chancellor Kwasi Kwarteng's mini-budget sparked a fall in the value of the pound.

He also told BBC Radio 4's Today programme that the problems in pensions funds - that led to intervention by the Bank of England - may not have been caused by the mini-budget.

Rees-Mogg said the value of the pound has been falling against the dollar because "interest rates in the US have been rising faster than they have in other markets".

He went on to say that "jumping to conclusions about causality is not meeting the BBC's requirement for impartiality".

The value of the pound fell to a record low against the dollar in September after the UK government announced large tax cuts, to be paid for by borrowing billions.

Image source, .

The pound has seen volatile trading after reports the Bank of England may go back on its decision to stop supporting the bond market on Friday.

The Bank's boss Andrew Bailey told pensions funds on Tuesday they had a few days "to sort it out".

However, a report in the Financial Times suggested it the Bank may actually continue to buy bonds after Friday.

The pound fell against the dollar after Bailey's blunt statement - but rose again after the FT report.

At 10am the pound was trading at 1.1035 dollars compared to 1.1143 dollars at the previous close.

Image source, .

MPs on the Treasury Select Committee are meeting this morning to discuss the government's "autumn fiscal events" - top of the agenda is the mini-budget and the market turmoil it has caused.

Chair of the Treasury Select Committee, Mel Stride, will host the meeting, which will be attended by:

• Paul Johnson, director at Institute for Fiscal Studies (IFS)
• Torsten Bell, chief executive at Resolution Foundation
• Professor Jagit S. Chadha, director at the National Institute of Economic and Social Research
• Sanjay Raja, chief UK economist at Deutsche Bank
• Dr Gemma Tetlow, chief economist at Institute for Government

We'll be bringing you all the latest on what's discussed when we know it.

The IFS has repeatedly criticised the government's recent fiscal policies. Its director has said the UK is "not on a sustainable fiscal path" and the adverse market reaction to the mini-budget shows the importance of fiscal and institutional credibility.

The Bank of England boss has said its emergency government bond-buying programme must end on Friday for the sake of UK financial stability.

But the Financial Times reports, external the Bank has signalled privately to bankers that it could extend its emergency scheme beyond this week.

As we've been reporting, the Bank's programme is aimed at helping pension funds that hold government bonds.

Read more here.

Image source, .

Let's step back a second.

We've been telling you that the Bank plans to stop buying bonds to help pension fonds.

But what do bonds - basically government debt in this case - have to do with pensions?

The government raises money for its spending by selling bonds 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.

So the Bank intervened again, buying more bonds on Tuesday. But now it says this scheme can't continue forever.

As we've been telling you, the UK's economy shrank by 0.3% in August -- but that doesn't mean the country has technically fallen into a recession yet.

So, what is a recession?

In normal times, a country's economy grows.

Its citizens, on average, become slightly richer as the value of the goods and services it produces - its Gross Domestic Product (GDP) - increases.

But sometimes their value falls, and a recession is usually defined as when this happens for two three-month periods - or quarters - in a row.

When this happens it's a sign the economy is doing badly.

The Bank of England has previously said that it expects the UK to fall into a recession by the end of the year.

How could a recession affect me?

Some people may lose their jobs, or find it harder to get promotions, or pay rises big enough to allow them to cope with increases in prices.

Graduates and school leavers could find a first job harder to get.

However, the pain of a recession is typically not felt equally across society, and inequality can increase.

Benefit recipients and those with fixed incomes are particularly likely to struggle.

• Read more: What is a recession and how could it affect me?

The UK is now "teetering on the edge of recession", according to Yael Selfin who is chief economist at KPMG.

Selfin says: "The ongoing squeeze on household finances continue to weigh on growth, and likely to have caused the UK economy to enter a technical recession".

Fears of a potential recession come amid latest GDP figures released by the ONS - which show the UK economy shrank, as GDP fell by 0.3%.

Some experts also expect that September could see an even bigger drop in economic output, with the extra bank holiday for the Queen's funeral and the period mourning affecting business opening hours, as well as higher costs starting to bite.

It comes after the International Monetary Fund (IMF) warned that the worst was still to come for the global economy, while 2023 would "feel like a recession" for many people.

There's a lot going on in the UK at the moment - here's a taste:

• The UK economy unexpectedly shrank in August, falling by 0.3%, official data shows
• The surprise drop strengthens the Bank of England's prediction that the UK will fall into recession this year
• The Bank of England boss said that its emergency government bond-buying programme must end on Friday for the sake of UK financial stability
• Liz Truss will face Prime Minister's Questions in the Commons later - it'll be the first time she's appeared at the dispatch box since the mini-budget sparked market turmoil
• The International Monetary Fund warned that the worst was still to come for the global economy, while 2023 would "feel like a recession" for many people

Image source, EPA

Business Secretary Jacob Rees-Mogg says the GDP figures released by the Office for National Statistics "can't be entirely relied on".

His comments come as the ONS released data which revealed that the UK's economy shrank by 0.3% in August, down from downwardly revised growth of 0.1% the previous month.

Rees-Mogg stressed that the ONS data is "highly subject to change".

However, he says if the figures are correct, chancellor Kwasi Kwarteng was right to provide "a modest fiscal stimulus" to encourage economic growth.

He tells BBC's Breakfast programme: "I think this ties in with what the chancellor was doing, moving away from the highest tax rates in 70 years, moving away from the risk outlined by the governor of the Bank of England early in the summer of five quarters of recession."

Former deputy governor of the Bank of England Sir Charlie Bean spoke to the BBC a little earlier.

Asked about the latest stats that show a dip in the Gross Domestic Product – meaning the economy shrank - Sir Charlie says never to read too much into the monthly figures.

He says there was a lot of volatility during the summer due to bank holidays, which contributes towards the GDP contraction.

The former deputy governor adds: "It confirms the general picture that the UK economy is flat-lining, to marginally contracting, which is what the Bank was expecting."

Sir Charlie says he does not see the GDP release, of a contraction in August by 0.3%, changing very much. But, he adds, it confirms the general picture.

The prime cause for current market volatility - "the original sin" as Sir Charlie puts it - is the mini-budget announced by Chancellor Kwasi Kwarteng and looming prospect of unfunded tax cuts.

We're now hearing Kwasi Kwarteng's reaction to the latest GDP figures, which showed that the UK economy shrank by 0.3% in August.

The chancellor says that the government's growth plan will "grow our economy, create more well-paid skilled jobs and in turn raise living standards for everyone".

We're now hearing a bit more from the Office for National Statistics, following announcements of an unexpected shrink in the UK economy during August.

ONS chief economist Grant Fitzner says the economy shrank in both production and services, "and with a small downward revision to July's growth the economy contracted in the last three months as a whole".

As we've been reporting, the UK's Gross Domestic Product - a measure of the size of the economy - fell by 0.3% in August.

The drop in monthly figures was driven by a sharp decline in manufacturers and maintenance work, the ONS says, which slowed down the oil and gas sector.

Fitzner adds that many other customer-facing businesses - like retail, hairdressers and hotels - were "faring relatively poorly".

Katie Hope
BBC business reporter

The UK economy unexpectedly shrank in August, falling by 0.3%, official data shows.

The surprise drop came after the economy grew 0.1% in July, according to the Office for National Statistics.

Analysts had expected economic growth to stall as businesses and households struggle with soaring prices.

The Bank of England has warned the UK will fall into recession towards the end of the year.