Summary

  • PM Liz Truss has announced another U-turn in her government's tax-cut plan, in an effort to reassure financial markets

  • Truss says she will reverse her plan to scrap an increase in corporation tax and admits the government's mini-budget had gone "faster and further" than many expected

  • Asked why she should stay on as PM, she says she is "determined to see through what I promised"

  • It comes after the PM sacked her chancellor, Kwasi Kwarteng, and replaced him with former health and foreign secretary Jeremy Hunt

  • Kwarteng lost his job just three weeks after he announced unfunded tax cuts that triggered financial turmoil

  • In a letter, Kwarteng backs Truss's economic "vision" for the country and says he will continue to support her from the backbenches

  • The PM has been under growing pressure from within her party to rethink her economic plans, with one Tory MP telling the BBC: "It's checkmate, we're screwed”

Live Reporting

Edited by Chris Giles

  1. UK economy unexpectedly shrinks in August
    Breaking

    Gross Domestic Product - a measure of the size of the economy - fell by 0.3% August, according to data from the Office for National Statistics (ONS).

    This comes after a growth of 0.1% in July 2022.

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  2. WATCH: Those bond market movements explained

    BBC business reporter Ben King explains the recent changes in the UK bond market and why the Bank of England was forced to intervene on Tuesday.

    Business reporter Ben King explains the recent changes in the UK bond market.

  3. FT reports Bank is prepared to extend emergency help

    As we've just been telling you, the Bank of England boss Andrew Bailey warned on Tuesday that its emergency government debt-buying scheme must end on Friday for the sake of UK financial stability.

    But the Financial Times is reporting the Bank has privately indicated to bankers it is prepared to extend its emergency scheme past Friday's deadline if market conditions demand it.

  4. Pensions help must end, Bank tells investors

    People walk past the Bank of England in LondonEPA

    The Bank of England boss says it will stop buying bonds to help pension funds this week despite pleas to continue.

    The emergency bond-buying programme aimed at stabilising their price and preventing a sell-off that could put some pension schemes at risk of collapse is due to end on Friday.

    "You've got three days left now and you've got to sort it out," Andrew Bailey told pension funds.

    The Bank acted after September's mini-budget which sparked market turmoil.

  5. Hello and welcome

    Hello and welcome to our live coverage.

    Liz Truss is due in the Commons later for Prime Minister's Questions – it will be the first time we've seen her at the dispatch box since the mini-budget sparked market turmoil.

    Today's PMQs also comes after the Bank of England said it would end a bond-buying scheme to stabilise pension funds on Friday, despite pleas for that to be extended.

    The Bank had stepped in to buy government bonds for the third time since the chancellor announced his controversial tax-cutting plans.

    Stick with us for all the latest.