Foreign Secretary James Cleverly insists that the government will stick to its current economic plans in order "to grow the economy".

Speaking on the Today programme on Radio 4, he says PM Liz Truss aims to protect people and businesses.

He also told the BBC that changing the current leadership would be a "disastrously bad idea, politically and also economically".

Cleverly accepts there was a link between market turmoil and the mini-budget of 23 September but says many of the challenges the UK faces are shared around the world and the main task of the government is to stimulate growth.

More now from Mohamed El-Erian who was asked if we can say for certain that the mini-budget was responsible for the UK's current problems in the financial markets.

Yesterday, Business Secretary Jacob Rees-Mogg suggested the link between the two was "commentary".

El-Erian says "while everybody would acknowledge that fluid global conditions have contributed to this, the main cause has been the mini budget".

He says there are ways to measure this.

"If you look at the interest rate differential between the UK and Germany and the UK and US, you will see that differential widens quite bit on the announcement of the mini-budget".

He admits it is not the only driver - saying global factors are at play like a worldwide increase in yields. But El-Erian says, "it has been much bigger in the UK than it has been in other countries".

Mohamed El-Erian, chief economic adviser at the financial services company Allianz, has been speaking to Radio 4 Today's programme.

He says it's likely the Bank of England will continue providing liquidity support, despite saying its emergency bond-buying scheme would end tomorrow.

The bank is like a doctor, he says, and it'll will be very difficult to walk away.

"The reality of central bank emergency interventions is that they tend to continue for longer than what is expected," he says.

Asked if the government understands the gravity of the situation, El-Erian says, "I think they're getting there, but they're not there yet".

He says he knows there is some talk amongst backbenchers that perhaps we need a reset of the mini-budget and in particular the unfunded tax cuts.

"That is a necessary condition to get us out of this mess," he says.

Foreign Secretary James Cleverly has just been speaking to Sky News, and he says the government should stick with Chancellor Kwasi Kwarteng's mini-budget

After Liz Truss's difficult encounter with Tory MPs at the 1922 Committee last night, Cleverly insisted they had to grow the economy.

"Ultimately, what that mini-budget was about, was protecting tens of millions of people from unaffordable energy prices. That was the bulk of that proposal.

"It was about making sure that taxes for 30 million people were reduced a little bit and those are really strong principles. I think we should absolutely stick with those."

We'll be hearing from Cleverly ourselves shortly, and we'll let you know what he says.

Chris Mason
Political editor

Image source, Reuters

"Dear oh dear."

The words of King Charles as he greeted Liz Truss for what will soon become to both of them a normal weekly thing.

It was the chat, or audience, the monarch has with the prime minister each week.

So what on earth was the King referring to?

It appears it is something of a verbal tic of his, an attempt to move a conversation on from pleasantries to the substance of the meeting.

Of course, we'll never know for certain.

The camera stopped a few seconds later, as the most discreet of chats a prime minister gets to have properly began.

Rather less discreet, her conversations with her own MPs.

Ms Truss reminded her backbenchers of the government's help with people's energy bills.

We're told she said she can "see a way through".

The question, then, for some, is why the markets are being kept waiting for more than another fortnight, when they are clearly so jittery, if she knows the solution.

Read more, here.

Paul Goodman also suggests the Conservative Party may need to find new leadership.

"All sorts of names are being thrown about, Rishi Sunak, even Boris Johnson, Kit Malthouse, Sajid Javid," he says.

But he says one idea doing the rounds is that Rishi Sunak and Penny Mordaunt "come to some kind of arrangement" and take over.

He says they're popular because they took two thirds of the vote amongst MPs in the leadership contest between them.

He says MPs could come to an agreement on the next chancellor, and party leader, without Tory members having to be involved.

A new leader would mean the Tory party's fourth leader in 7 years, and Goodman says the party is at a point where all decisions are difficult ones.

The key issue, he says, is that at a time of international turmoil, the government made itself a target for the markets to "shoot at".

Image source, .

Paul Goodman, former Tory MP and chief executive of Conservative Home, has just been speaking to BBC Radio 4's Today programme.

He wrote on his website last night that it was more likely than not that the mini-budget would be withdrawn, and Chancellor Kwasi Kwarteng would have to go.

Goodman says there are elements that are the government's fault, elements that are the bank's fault and other elements that are the result of a wider international crisis.

He says he is wondering whether the government can get a package of cuts together to calm the markets, and if not, if they will demand the withdrawal of the mini-budget.

Criticisms are not coming only from the opposition, he says.

Senior backbenchers - like Mel Stride chair of the Treasury Select Committee - have recently come out to say part of the mini-budget should be scrapped. But, Goodman adds, it is not clear whether they are the majority.

Image source, Getty Images

Continuing unease about the Treasury's planned tax cuts features on several of the front pages.

According to the Times, the PM has been told to "rip up" the mini-budget by her most senior advisers. The paper says she now faces the choice "between further unnerving the markets or a politically humiliating retreat".

The Financial Times reports that "a growing number" of Conservative MPs also want the prime minister to scrap or phase in tax cuts "rather than embark on a painful squeeze on public spending over many years".

The Daily Mirror sums up her dilemma with the headline: "U-turn or you go".

The i newspaper suggests that Tories are now in "open revolt" against Ms Truss and one MP tells the Guardian that the atmosphere was "funereal" at the meeting of the 1922 Committee last night.

But the Daily Express says Ms Truss "swatted away" the attacks on her economic plans - with her supporters instead directing their anger at the Bank of England for refusing to extend its emergency bond-buying programme.

See more on the newspapers here.

Image source, PA Media

It was another turbulent day in Westminster. Here's a quick summary of what happened:

• Liz Truss appeared at PMQs for the first time since the chancellor set out the mini-budget
• She was repeatedly asked about her management of the economy - which has been in turmoil since her measures were announced

• Truss said she wouldn't cut government spending, with Downing Street later saying there would be difficult decisions to make
• Senior MP Mel Stride suggested further government U-turns may be needed on the planned tax cuts in order to avoid further market turmoil
• The prime minister went to a meeting of the 1922 committee of Tory backbenchers in the evening - MP Robert Halfon said Truss was "trashing blue collar conservatism"
• Earlier in the day, the Bank of England confirmed it would bring its emergency intervention to an end on Friday
• And the Office for National Statistics announced that the UK economy shrank by 0.3% in August, strengthening predictions that the UK economy will fall into a recession

Liz Truss is coming under more pressure from some of her own MPs to rethink the tax cuts announced in last month's mini-budget.

Her strategy was criticised when she attended a meeting of Tory backbenchers last night - with one MP accusing her of wrecking ten years of Conservative policies aimed at helping working people.

No 10 insists she is sticking to her plan. We'll be bringing you the latest developments throughout the day.

Our live coverage is now closing. Thanks for joining us on another eventful day in UK politics and economics.

Today's writers were: Emily McGarvey, Heather Sharp, Laura Gozzi, Christy Cooney, Jack Burgess, Aoife Walsh, Malu Cursino, Andrew Humphrey and Alys Davies.

Our editors were Nathan Williams, Emma Owen, Chris Giles and Alex Therrien.

Image source, PA Media

We're soon going to be pausing our live coverage of UK politics and economics. But before we do, here's a recap of the key events of the day:

• Prime Minister Liz Truss said she wouldn't cut government spending, as questions continue over how she will pay for the tax cuts promised in her government's mini-budget
• Asked by Labour leader Keir Starmer during Prime Minister's Questions if she would cut public spending, Truss said she wouldn't but would "make sure we spend public money well"
• Later, her official spokesman said the "global challenges" the UK was facing meant the government would have to make "difficult decisions"
• The PM also faced criticism from some of her party's own members - one senior MP, Mel Stride, suggested further government U-turns may be needed on the planned tax cuts in order to avoid more market turmoil. And MP Robert Halfon told the 1922 committee of Tory backbenchers that Truss was "trashing blue collar conservatism", sources told the BBC
• Outside of Parliament, the Bank of England confirmed it would bring its emergency intervention, designed to stabilise the economy following the announcement of the government's tax cuts last month, to an end on Friday
• The yield on government 10-year bonds briefly reached 4.62%, the highest levels since 2008, at the height of the financial crisis
• The UK economy unexpectedly shrank by 0.3% in August, according to the Office for National Statistics, strengthening predictions that it will fall into a recession

Ione Wells
Political Correspondent, BBC News

I’m told by sources in the room that MP Robert Halfon told the 1922 committee of Tory backbenchers that Liz Truss was "trashing blue collar conservatism".

He told her the Conservative Party’s record over the last 10 years under David Cameron, Theresa May and Boris Johnson had included things like boosting apprenticeships and the living wage, whereas she had cut tax for millionaires and wants to cut affordable housing and to cut benefits.

MPs present in the room say he got cheers, but that Truss looked “shocked” and said he could come and speak to her.

MPs present also said James Cartlidge MP criticised the mini-budget and said that communication had been poor and she had not prepared the markets.

The King has hosted Prime Minister Liz Truss for an audience at Buckingham Palace.

The pair met on Wednesday evening, with an image showing them shaking hands as the prime minister arrived.

It came after Truss attended a meeting of the 1922 Committee of backbench MPs, where reports suggest she faced unrest about her handling of the ongoing turmoil in the UK economy.

Could the PM balance the numbers without spending cuts?published at 19:37 British Summer Time 12 October 2022

19:37 BST 12 October 2022

Dharshini David
Economics Correspondent

From help towards energy bills to freezing tax rises, the chancellor’s measures spell a hefty bill for the public purse.

The Institute for Fiscal Studies has warned the government needs £60bn of savings just to stabilise public debt as a proportion of national income within five years. So how can the prime minister claim that she could achieve that without cuts to public spending?

The energy bill support package will count towards spending, pushing up the total – that could be offset by cuts to department budgets, the “difficult decisions” Downing Street earlier referred to.

But public services are already feeling the squeeze from inflation.

Further out, Liz Truss may hope that the government’s aim for growth of 2.5% per year delivers, through extra tax contributions and by making the debt look smaller relative to the size of the economy.

But economists warn that any boost to growth may be too small and too late to make that work.

Ultimately, it’ll be the watchdog, the Office for Budget Responsibility, that will have to decide if the figures add up, or not.

Can Truss find a route past the backseat drivers?published at 19:11 British Summer Time 12 October 2022

19:11 BST 12 October 2022

Chris Mason
Political editor

The government appears to have found itself inadvertently driving down a cul-de-sac - and doesn't want to be seen to reverse out of it.

Remember it has already, at the very least, eased off the pace with the cancellation of the tax cut for the best paid.

The challenge is how to retain as much as economic and political credibility as possible, when preserving one risks the other.

Some have suggested the clearest way to calm the markets would be to junk the tax cuts.

But doing that could finish the government politically.

The other option is big spending cuts, again to prove the government can make its numbers add up.

But Liz Truss appeared to rule that out too today.

They are not saying how both these things can be possible.

Ministers hope this whole strategy turns out not to be a cul-de-sac after all, and after several twists and turns and adventures over the grass verge, a route to economic and political credibility is found, alongside economic growth.

But right now plenty of backseat drivers, within the Conservative Party and beyond, are questioning both the navigation and the driver.

What does this mean for my workplace pension?published at 18:50 British Summer Time 12 October 2022

18:50 BST 12 October 2022

Kevin Peachey
Personal finance correspondent

Heather Wing asks whether, following the deadline from the Bank of England, her occupational pension is safe?

It is correct that the Bank of England has told pension funds that its emergency bond-buying operation will end this week.

That is targeted at a specific section of the pensions sector. Importantly, the warning does not extend to the pension savers themselves.

Even if you have a so-called defined benefit pension, that will be safe, experts say.

If one of these pension funds did get into trouble, then the employer is legally obliged to pump money into the scheme. In the unlikely event that doing so puts the employer out of business then there is a safety net called the Pension Protection Fund.

Read more: How safe is my pension

Nick Watt
Political editor, BBC Newsnight

I have encountered a wall of derision and unease about this prime minister - I haven't felt something like this from Conservative MPs since the 48 hours before Boris Johnson threw in the towel.

That is not to say that we're getting to the end of Liz Truss's premiership - that isn't being talked about at all at the moment.

But there is a widespread view across the party that Truss has got herself into a hole and unless she takes some pretty radical steps she is going to find it difficult to get herself out of it.

One minister said to me: "We are completely in a dreadful place. There is no way out from this - maybe Liz Truss will find a way, but I cannot see it."

"It's like Black Wednesday in 1992, when interest rates shot up, we lost economy credibility, and it took us 15 years to get it back."

And this was from a loyal minister and a strong Brexiteer, who has lots of reasons to support Truss.

How are different pensions affected?published at 18:28 British Summer Time 12 October 2022

18:28 BST 12 October 2022

Kevin Peachey
Personal finance correspondent

Andy Atkinson, from Rugby, asks whether he should be worried about his defined contribution and defined benefit pensions.

First things first, some definitions.

A defined contribution pension is when you build up a pot of pension savings which is invested. On retirement, you have various options.

One of those is to buy an annuity with all, or part, of that pot. Recent events mean annuity deals are actually better than they have been for some time.

A defined benefit pension is a bit different. It sees the amount you receive in retirement depend on how long you have been in the scheme and your salary during that time.

Some of the funds which control these pensions have been at the centre of the turbulence of recent days.

However, pensions consultants stress that, whatever type of pension you have, it is safe.

Read more: How safe is my pension?

Ione Wells
Political Correspondent, BBC News

Liz Truss has finished addressing her backbench MPs now, and I asked people what went on when they left.

One Truss critic grimaced when I asked “how was it?”

Truss herself left and said “very good”.

One MP who backed Truss in the final two told me she acknowledged to MPs in the room that her presentation could have been better and she could have laid the ground better on recent policies.

She acknowledged there had been some unhappiness.

A few Sunak supporters have left saying it was “fine”, through slightly gritted teeth smiles.