More now from international trade minister Greg Hands, who said "let's wait and see" when he is asked if there will be any more U-turns on the government's mini-budget.

He tells Sky News: "Let's wait and see. You won't have long to wait for the 31st of October for the chancellor to lay out those plans.

"I do say that the prime minister and the chancellor are absolutely resolute, determined.

"The growth plan (is) the centrepiece, but we'll have to see some of the detail including a full forecast from the Office for Budget Responsibility on the 31st of October."

International trade minister Greg Hands has insisted it's "not unusual" for a minister to return early from a trip abroad.

As we've been reporting, Chancellor Kwasi Kwarteng has cut short his visit to the US where he has been meeting with other finance ministers.

Kwarteng is flying back to the UK to hold discussions with the prime minister and Conservative MPs, with a U-turn over the mini-budget on the table.

Hands tells Sky News: "It's not unusual to come back a day early from an international visit. He's coming back for discussions with colleagues, we obviously have the medium-term fiscal plan coming up on 31 October, so just in a couple of weeks' time. There's work to be done, there's conversations to be had with colleagues.

"But the major meat of the meetings of the IMF and World Bank have finished and the chancellor of the exchequer has been there two days."

More from former Bank of England member Andrew Sentance, who said the chancellor has left it too late to reverse his planned tax cuts or introduce new taxes to calm the markets.

Speaking about Kwasi Kwarteng's "quick exit" from meeting other finance ministers in New York, Sentance says it reminds him of the 1976 sterling crisis, when then Chancellor Dennis Healey was due to attend a meeting with the IMF but had to turn back on the way to the airport to address growing financial chaos at home.

Sentance says "this crisis has some way to run yet".

He goes on to call for a significant rise in interest rates at the Bank of England's next meeting in November - by three quarters of a percent or even one percent

He argues this would still only take interest rates to just over 3%, which is still quite low by historical standards - even if it sounds like a "dramatic" hike.

Much of the turmoil the UK has seen in recent weeks has been caused by the government and Bank of England pulling in different directions over economic policy, a former member of the Bank's Monetary Policy Committee has said.

Andrew Sentance, who is now a senior adviser at the Cambridge Econometrics consultancy, tells BBC Radio 4's Today programme that the volatility in financial markers was underpinned by a "tension between monetary and fiscal policy objectives" .

He says this means the Bank is working to take money out of the economy by raising interest rates to fight rising inflation, while Chancellor Kwasi Kwarteng is "pumping" money into the economy in the form of tax cuts and energy subsidies.

Sentance adds that this has been exacerbated by the Bank being "so cautious" about raising interest rates, noting that this meant markets have been "worried that the government is going in the opposition direction".

Image source, Huw Evans Picture Agency

Some Tory MPs think the government's tax-cutting plans should be reversed, while others believe the help with energy bills should be more targeted.

Other scenarios being discussed by Tory MPs include the chancellor resigning or the prime minister being ousted.

But there is little agreement on what happen next if Liz Truss leaves.

Plymouth Moor View MP and ex-Veterans Minister Johnny Mercer says his constituents have been impacted by rising interest rates after the mini-budget.

He tweets: "I want you to know that I get it, that most of us get it, and that we will do all we can to change it.

“Heartbreaking. Unconscionable. Politically unsurvivable. I got into politics to help people like this. Will not stand and watch it burn.”

But ally of Truss Sir Christopher Chope tells the BBC: “They think that they can drive the prime minister and the chancellor off course.

“If we were to increase corporation tax having said that we’re not going to, that would be totally inconsistent with the prime minister’s policy of promoting growth, growth and growth.”

Image source, Getty Images

They say a week is a long time in politics - so here's a recap of what's happened so far.

On Monday, the chancellor brought forward by several weeks the date of his plan to balance the government's finances to 31 October - but it failed to reassure markets. Efforts by the Bank of England to calm things and the appointment of an experienced civil servant as Permanent Secretary to the Treasury also seemed to fall short.

On Tuesday, the Bank of England took further steps to try to calm markets as the pound fell and borrowing costs surged. It warned that if the market volatility continued there would be a "material risk to UK financial stability".

By Wednesday, Liz Truss was coming under growing pressure from a number of sides to reverse tax cut plans. During a grilling by opposition leader Sir Keir Starmer in Prime Minister's Questions, Truss ruled out making cuts to public spending to help pay for them. By the evening, she was reported to be accused of "trashing blue-collar conservatism" by a member of her own party at a meeting of the 1922 committee of backbenchers.

Thursday saw swirling speculation that the chancellor may be about to scrap major parts of his tax-cutting plan. The official line is the government's position hasn't changed. But we now know Kwasi Kwarteng has left Washington, where he was attending a finance summit, and is heading back to the UK for crunch talks with Truss and Tory MPs. Asked yesterday if he'll still be in his job next month, the chancellor said: "Absolutely, 100%."

Today, those talks between Kwarteng, Truss and Conservatives will get underway against a backdrop of the Bank of England planning to stop buying bonds as part of its emergency measures at close of play. Beyond that, watch this space!

Faisal Islam
Economics editor

Image source, Getty Images

Asked if the chancellor's early departure was a sign of panic, a source close to him tells the BBC he was “very very keen to be in London talking to colleagues”.

Just hours previously Mr Kwarteng told broadcasters there was no change in the position on the mini-budget and his “total focus” was on delivery of it.

The Treasury would not say if the change to his travel plans had been ordered by Prime Minister Liz Truss.

It denied the change showed the chancellor had now accepted the case for a significant further U-turn.

Echoes of previous finance ministers curtailing their travel plans because of market turmoil, such as Denis Healy in 1976 and the Greek finance minister Evangelos Venizelos in 2011 were dismissed by No 11.

As we are reporting, the chancellor has cut short a visit to the US - catching the last flight home from Washington.

He was seen getting into an SUV and is due to arrive back in London this morning.

It comes as PM Liz Truss faces calls from Tory MPs to change course on her economic plans for big tax cuts.

A source close to Kwasi Kwarteng believes the chancellor “really wants to engage not only with government colleagues, but also MPs... because fiscal responsibility is absolutely core to what we're trying to do”.

He is said to have made the decision to fly back to the UK because he is "very, very keen" to talk to colleagues face-to-face.

Image source, Getty Images

More now on the main development overnight.

Chancellor Kwasi Kwarteng has cut short a trip to the US to return to London for urgent talks with PM Liz Truss.

Kwarteng cancelled meetings at the International Monetary Fund in Washington so he could fly home a day early and consult widely with colleagues in government and Parliament.

He and Liz Truss are facing mounting pressure to U-turn on more of their tax-cutting policies.

Read more here.

Before he left Washington, Chancellor Kwasi Kwarteng spoke to reporters where he was asked about the possibility of a U-turn on the mini-budget and his position in Liz Truss's government.

• Kwarteng said he was "totally focused" on delivering the tax-cutting plans as outlined in the mini-budget, which are aimed at increasing economic growth
• He reiterated this response when asked about the possibility that corporation tax could rise
• The chancellor said the government's position "hasn't changed", adding that he will announce a medium-term fiscal plan on 31 October
• As for whether both he and Prime Minister Liz Truss would still be in office in a month, Kwarteng said: "Absolutely 100%. I am not going anywhere."

In a later interview with The Telegraph, he did not rule out a rethink on corporation tax. According to the newspaper, in response to a question about how markets “have improved today because they think you're about to do a U-turn on corporation tax”, Mr Kwarteng said: “Let’s see.”

Image source, Getty Images

Last month, the pound hit a 37-year low against the US dollar just days after Kwasi Kwarteng presented the controversial mini-budget to MPs.

But other currencies are experiencing similar trends too.

In overnight trading, the Japanese yen touched a 32-year low against the US dollar - falling to 147.66 before regaining some ground - after official figures showed that prices had risen faster than expected in America.

Japanese Finance Minister Shunichi Suzuki said the government will take "appropriate action" against the currency's volatility.

Read more on this here.

MPs speculate on future of Liz Truss and the chancellorpublished at 04:35 British Summer Time 14 October 2022

04:35 BST 14 October 2022

Chris Mason
Political editor

Image source, PA Media

A government that has barely begun is confronted by open questions about its imminent end.

That is the astonishing truth at Westminster, so spectacularly has Liz Truss cratered her authority with her own MPs.

In the short term, she seeks to salvage her premiership and her programme for government, or at least any parts of it that can command the confidence of her party and the financial markets.

Her critics say waiting until the end of the month to announce her plans is unsustainable.

Meanwhile Tory MPs speculate about her future and that of her chancellor.

Could Kwasi Kwarteng be the fall guy for the chaos, some ask.

Could he be sacked, or resign?

You can read BBC political editor Chris Mason's blog in full here.

Let's take a look at the front pages of Friday's papers.

They are dominated by talk of a U-turn on the recent mini-budget and a possible bid by Tories to oust PM Liz Truss.

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Read the full round-up here.

Hello and welcome to our live coverage of developments in UK politics - as we restart our coverage it has been confirmed Chancellor Kwasi Kwarteng has cut short a trip to the US to return to London.

He ended his visit to the International Monetary Fund in Washington to head home and begin discussions about the recent mini-budget with colleagues.

It follows a hectic day on Thursday during which many Tory MPs suggested a full U-turn on the fiscal plan was inevitable.

We'll bring you all the latest.

It has been another frenetic day in UK politics as pressure grows on the government to rethink its mini-budget. Here's a round-up of what's been happening:

• Chancellor Kwasi Kwarteng sidestepped questions about whether elements of the mini-budget would be reversed, telling reporters the government's position hadn't changed
• Speaking from Washington, he said more details would emerge on 31 October, saying he was "totally focused" on delivering his mini-budget
• But in a later interview, Kwarteng appeared to not rule out backtracking on dropping the planned increase in corporation tax
• The chancellor also said that he and Prime Minister Liz Truss would "100%" be in their roles by the end of month, stating: "I'm not going anywhere"
• Meanwhile, the pound earlier jumped from under $1.11 to $1.13 amid speculation about a possible government U-turn
• A Downing Street spokesperson refused to comment on reports that talks are under way at No 10 on reversing parts of the mini-budget, saying repeatedly "our position hasn't changed"

We're pausing our live coverage now but you can still follow the latest developments here. Today's page was written by Anna Boyd, Malu Cursino, Emily McGarvey, Jo Couzens, Marie Jackson, Marita Moloney, Aoife Walsh. It was edited by Emma Owen, Dulcie Lee, Chris Giles and Heather Sharp.

Lenders expect mortgages and credit for consumers and businesses to become less available in the coming months as more people and businesses find they can't pay back loans, a Bank of England survey suggested on Thursday.

More people are expected to have difficulty paying their mortgages, credit cards and other household and business loans in the months ahead.

Mortgage rates have been rising as the Bank of England puts interest rates up to try to combat the soaring pace of price rises, and rose sharply after the government's mini-budget caused a sharp drop in the pound.

However, mortgage rates dipped slightly on Thursday.

Image source, UK Parliament

Alicia Kearns has joined the growing numbers of Tory MPs expressing concerns over the mini-budget.

Kearns, who has just been elected as the new chairwoman of the Commons Foreign Affairs Committee, was asked on LBC's Tonight With Andrew Marr whether she would like to see the unfunded tax cuts reversed.

She replied: "Do I think we should be borrowing en masse where our children have to pay this back for decades to come? No, I don't."

"That's a yes, isn't it?" she was asked. "Yes," she responded.

She said that as markets were not "lefty" or "anti-government", "the fact they have been spooked is something that should be taken incredibly seriously".

Kearns added: "We govern only with the support of the people, and we are not bringing them with us currently."

It comes after Conservative backbench MP John Baron told the BBC some of the tax-cutting agenda could be saved, provided the markets were given reassurance over funding, but said the PM needed to "turn the ship around pretty quickly".

Meanwhile, the former chief whip Julian Smith, MP for Skipton and Ripon, posted this somewhat cryptic tweet this afternoon.

Yesterday, following a meeting of the 1922 committee of backbenchers, our political correspondent Ione Wells reported that she was told by sources in the room that senior MP Robert Halfon told the Tory backbenchers that Truss was "trashing blue-collar conservatism".

And the Conservative chair of the Treasury Select Committee, Mel Stride, questioned in a tweet, external whether any plan that did not row back at least partly on the tax cuts package would satisfy the markets.

Leila Nathoo
Political correspondent

Image source, Getty Images

Liz Truss and Kwasi Kwarteng insist the tax cuts announced in the mini-budget will boost economic growth - but they've promised a series of other policy changes which they say will also help grow the economy.

These so-called "supply-side" reforms were intended to be across eight areas: business regulations, agriculture, housing and planning, immigration, mobile and broadband, financial services, childcare, and energy.

They were supposed to be announced in the run-up to the chancellor's next economic statement - originally scheduled for the end of November, but now brought forward to 31 October.

If they were so central to the growth plan, then where are they?

We're now expecting the first of the announcements to come next week - but not all of them will be ready by the end of the month.

The delay suggests some of the proposed changes - like loosening planning rules to encourage building, or trying to attract more foreign workers to plug gaps in the labour market - are contentious within government and the wider party, and are still being haggled over.

Read the full article here.

Shadow Chancellor Rachel Reeves has accused the government of "behaving like pyromaniacs" by setting the UK economy ablaze.

Reeves told PA news agency that although global factors are at play in the economic crisis it's vital that the government doesn't "fan the flames".

"It is ordinary working people who are paying the price," she said.

Reeves added that Liz Truss has caused "so much damage" during her first month in office.

Image source, Getty Images

The former home secretary, Priti Patel, has suggested the government could be forced into a further U-turn over the mini-budget, as speculation continues that changes may be imminent.

Asked on Sky News' Beth Rigby Interviews programme whether the PM's pledge not to raise corporation tax should be reversed, Ms Patel said there was an irony that market forces would "probably dictate some of these changes now" as they sought stability.

She said stability was "absolutely crucial" for people to carry on living their lives and for institutions to function.

Ms Patel, who did not publicly back any candidate in the summer-long contest to replace Boris Johnson, also urged Liz Truss to stick to the 2019 manifesto.

Echoing comments from her former fellow cabinet minister, Nadine Dorries, Ms Patel said it was imperative that the Conservatives continued to deliver on it, including passing the delayed Online Safety Bill into law.