Truss meets MPs as she seeks to shore up her leadership

1. Prime Minister Liz Truss has met a Eurosceptic group of Tory MPs this evening as she attempts to secure her leadership
2. Business Secretary Jacob Rees-Mogg told reporters the meeting with MPs of the ERG went "extremely well"
3. Earlier, new Chancellor Jeremy Hunt told ministers spending cuts were coming and their budgets needed to be slashed
4. On Monday, Hunt scrapped nearly all the tax cuts announced at last month's mini-budget
5. Earlier today, Truss said she was no longer promising to raise state pensions in line with rising inflation - currently about 10%
6. The International Monetary Fund has welcomed the government's mini-budget U-turn

Thanks for joining us

We're going to leave our live coverage here for today - catch up with all the key developments in our main story here.

Today's updates were written by Aoife Walsh, Jack Burgess, Adam Durbin, Alys Davies, Emily McGarvey, Imogen James, and Becky Morton.

The page was edited by Emma Owen, Claudia Allen, Alexandra Fouché, and Dulcie Lee.

What's happened today?

EPA

Cabinet ministers met this morning to discuss spending cuts

Let's take a look at the main headlines on a day where Prime Minister Liz Truss has battled to regain authority amid the fallout over the government's major mini-budget U-turn.

• The prime minister met the European Research Group (ERG)of Conservative MPs in Parliament this evening and has committed to increasing defence spending to 3% of GDP by 2030
• Truss has also said she's no longer promising to raise state pensions in line with surging inflation, as she asked ministers to look for spending cuts
• New Chancellor Jeremy Hunt used this morning’s cabinet meeting to tell ministers about the scale of spending cuts which are coming
• He's currently preparing tax hikes and spending reductions to plug a black hole in the government's finances worth tens of billions

• Labour leader Keir Starmer called for a general election if the Tories change their leader again. It has been another day of intense pressure over the PM's future and Starmer says the government's credibility is "shot through"

• The International Monetary Fund has welcomed the reversal of much of the mini-budget, saying the government's new approach will "better align fiscal and monetary policy in the fight against inflation"

Bank of England pushes back gilt sale

John Walton/PA Wire

The Bank of England says the sale of government bonds has been postponed because of the fiscal announcement expected from new Chancellor Jeremy Hunt at the end of this month.

The Bank's first sale of government bonds - known as gilts - will now take place on 1 November.

The central bank had previously planned to start buying UK government bonds on 31 October.

The government borrows money to fund its spending plans by selling bonds, or "gilts", to investors such as pension funds and big banks on international markets.

The investor then gets to receive a stream of future payments, or "yield", based on the interest rate the government has offered.

Amid concerns over whether the government's plan will work, investors have been demanding much higher interest rates to lend to the UK government.

But the Bank has planned to lower these prices by buying its bonds.

'We're destroying our own party from the inside' - Tory Party members

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Liz Truss with Mackenzie Vaughan

We've been hearing from some Conservative Party members in the Cotswolds on how they are feeling about Liz Truss's premiership after many of the promises she made during her leadership campaign were binned.

Julia Judd told BBC News: "I voted for Liz Truss, but I regret it. The values that I hold don't seem to be the values that some modern Conservatives are holding.

"I just don't understand some of the decisions that are being made. They are not Conservative decisions."

Mackenzie Vaughan said: "I've been a member for years and this is the first time I'm totally questioning it. And it's because we're not uniting. I feel we're more backstabbing, and we're destroying our own party from the inside.

"We have a prime minister, we should be supporting her."

Jill Rixon said: "She persuaded me. I thought she was very strong, she seemed to come across very well, so I voted for Liz in the end.

"But she really has become quite a weak personality. I feel that she should go."

David Fowles said: "I didn't vote for Liz, I voted for Rishi, but I have a prime minister and a chancellor who I respect. I want to give it time to see whether the changes in the policies will actually bear fruit. "

Malcolm Dunn said: "The needs of the country come before the needs of our party. We are a patriotic party, and we need somebody in place immediately. So I don't think that there is, simply, the time to have a leadership contest."

Two Tory MPs say they will not vote to end triple lock

Adam Durbin

BBC News Live reporter

In a sign of potential trouble brewing ahead for the prime minister, two Tory MPs have declared they will not vote to end the triple lock on state pensions.

Writing on Twitter, Maria Caulfied says: "Pensioners should not be paying the price for the cost-of-living crisis whether caused by the war in Ukraine or mini-budgets."

As we've been reporting, Liz Truss's spokesman earlier refused to rule out sticking to the long-standing Conservative Party policy of annually lifting state pension payments by whichever is the highest out of:

• price rises (in the form of inflation)
• the average growth of earnings
• 2.5% a year

Responding to Caulfield's post, fellow Conservative backbencher Steve Double also said he would not vote to go back on the pledge.

The guarantee has been in place ever since it was introduced under the Conservative/Liberal Democrat coalition, apart from a one-year suspension in 2021 over a Covid-driven spike in wage growth.

Committing to this policy was also included in the Conservative Party's 2019 general election manifesto.

Currently the inflation rate stands at around 10%, whilst the figure for average earnings is 5.4%.

Meeting with Truss 'positive' - ERG chairman

ERG chairman Mark Francois has told journalists after meeting Liz Truss this evening that the encounter was "very positive".

"We were delighted to hear her make an unequivocal commitment to spending 3% of GDP on defence by the end of the decade.

"She was asked very specifically about that. She was very clear that that commitment remained."

He also said she stood by the legislation on the Northern Ireland Protocol.

"She was absolutely committed to see a robust outcome regarding the Northern Ireland Protocol.

"Very, very clear about that. Remember that she, when she was foreign secretary, was involved in toughening up that legislation."

He added: "She was open. She answered every question that she was asked directly. And as you will know, colleagues in the ERG aren't necessarily hesitant about asking questions. And so she was very clear in the answers that she gave."

Boris Johnson aide 'helping out' Liz Truss

Iain Watson

Political correspondent

Liz Truss was accompanied this evening by Boris Johnson's former deputy chief of staff David Canzini.

Downing Street sources say he is "helping out" in her political office as of today.

He is credited with masterminding the ultimately unsuccessful task of keeping Johnson in No 10, but is seen by many as an accomplished strategist and political "grown-up".

What is the ERG?

Getty Images

Mark Francois is the current chairman of the ERG

As we've been reporting, Liz Truss has been meeting the European Research Group - or ERG - of Tory MPs in Parliament.

It's one of several factions within the parliamentary Conservative Party who have been holding talks with the PM.

The group, which focuses on the UK's relationship with the EU, has been around for years but was particularly prominent during the Tory Party's internal wrangling over Brexit.

At that time, it was associated with the hard-line Brexiteer wing of the party.

The current chairman of the group is Mark Francois and previous chairs Jacob Rees-Mogg, Steve Baker and Suella Braverman are now ministers under Truss.

Truss 'commits to increasing defence spending'

Iain Watson

Political correspondent

Following a half hour meeting between Liz Truss and the European Research Group (ERG) of Conservative MPs in Parliament this evening, sources in the room said the mood had been "very positive".

She was "robust" on issues close to their hearts, like Northern Ireland and defence.

The prime minister stood by the legislation on the Northern Ireland Protocol - though Downing Street sources added she wanted to see a negotiated solution as the preferred option.

And she stood by her commitment to increase defence spending to 3% of GDP by 2030 (a '"red line" for Defence Secretary Ben Wallace).

She was asked six questions, but none were about the ditching many of her tax policies.

However, Truss has told the ERG the changes she had made had been "painful".

Downing Street sources also say she expressed her "disappointment that she wasn't able to follow through on her tax cuts'", but remained committed to her growth agenda and "supply side reforms".

Rees-Mogg says Truss meeting with Tory MPs went 'extremely well'

Iain Watson

Political correspondent

Liz Truss has just left the European Research Group meeting in Westminster without offering comment.

But Business Secretary Jacob Rees-Mogg has also emerged from the meeting of Eurosceptic Tory MPs, declaring to journalists outside the room that "it has gone extremely well".

Table-banging welcome for Truss as she meets Eurosceptic MPs

Prime Minister Liz Truss has just begun meeting Tory MPs from the European Research Group (ERG), a collection of Eurosceptics from the right of her party.

Truss was seen smiling at reporters as she arrived, while the sound of table-banging (a traditional - and loud - form of expressing approval in Westminster circles) was heard as she entered the room.

Business Secretary Jacob Rees-Mogg, former party leader Sir Iain Duncan Smith, and ERG chairman Mark Francois were all seen entering the meeting room in Westminster.

Costs set to remain high for a sustained period, says energy boss

Energy costs are set to remain high for a "sustained period" and homes and businesses should be encouraged to buffer themselves with increased use of renewables, an energy boss has said.

Nigel Pocklington, chief executive of renewable energy supplier Good Energy, told Times Radio: "I think we should be encouraging homes and businesses to become more independent in their energy usage ... all of which will help buffer us."

He says after focusing on the ups and downs of the wholesale market over the last six months, the "fundamental truth" is that gas is in relatively short supply.

"It's obviously hugely exacerbated by what's going on in Russia - but we're a gas-dependent country and we need to sort of square the circle there, and that is where renewables can play a big part."

Referring to the chancellor's announcement that the two-year energy price freeze will now only run for six months, Pocklington said those who will not be eligible for targeted help "do need to be thinking once again about the fact that, in current market conditions, energy bills will go up very considerably from the level they are today".

Find out more about what help is available here.

'Pub industry is already suffering badly'

Paul English

Let's hear a bit more about how the fallout from the mini-budget is affecting people like Paul English, who owns the Kings Head pub in Docklow, Herefordshire.

Speaking to Radio 5 Live, he says many of his fellow publicans are calling the U-turn on freezing alcohol duty the "final nail in the coffin" for their businesses.

But he feels the government has gone one step further."I think they've ripped the lid off, got a wooden stake out and are driving it through the heart of the industry," he says.

"We're already suffering badly because customers are spending less and coming in less frequently."To come along and say 'we're not going to help you much, or for very long, and we're going to put prices up in your pub as well,' I think they're trying to kill the industry."

'What world do you belong in?' Wales' first minister turns on Tory leader

Drakeford: First minister's fury with Welsh Tory leader

Wales' first minister has erupted in anger under questioning from the Welsh Conservative leader in the Senedd.

Shaking with rage, Mark Drakeford told Andrew RT Davies it was "shocking that you think that you can turn up here with the mess that your party has made, to the budgets of this country, to the reputation of this country around the world".

"You think you can turn up and claim some sort of moral high ground? What sort of world do you belong in?" Labour's Drakeford asked.

After the angry scenes in the Welsh parliament, Davies said in a statement: "Rather than take responsibility for Labour's poor running of the NHS [in Wales], Mark Drakeford looked to pass the blame onto the UK government."

Read more here.

IMF welcomes government mini-budget U-turn

The International Monetary Fund has said that the government U-turn on last month's mini-budget will help "better align fiscal and monetary policy in the fight against inflation".

“The UK authorities’ recent policy announcements signal commitment to fiscal discipline and help better align fiscal and monetary policy in the fight against inflation. We look forward to the medium-term fiscal plan," an IMF spokesperson said.

The statement comes after the IMF openly criticised the UK government in September over its plan for tax cuts, warning that the measures were likely to fuel the cost-of-living crisis.

In an unusually outspoken statement last month, the IMF said the proposal was likely to increase inequality and add to pressures pushing up prices.

Nothing is off the table

Iain Watson

Political correspondent

Downing Street has made clear that nothing is off the table when it comes to government expenditure.

So No 10 officials couldn't say that the pensions "triple lock" - which would ensure an inflation-proof rise in the state pension - was safe. They couldn't exempt the health service from cuts, though they want to protect front line services.

But a different formulation was used when it comes to defence. No 10 has insisted Liz Truss is standing by her commitment of increasing defence spending to 3% of GDP by 2030.

The defence secretary Ben Wallace considers increasing spending in line with her promises made over the summer as a "red line", allies say.

So, as Jeremy Hunt is meant to bring stability to the Truss government, he's unlikely to want to do anything which would push a senior and popular cabinet minister out when the new spending plans are announced at the end of the month.

A defence source said: "The prime minister made clear in her leadership campaign and as recently as 29 September... that she wants 2.5% of GDP by 2026 and 3% by 2030 to be spent on defence.

"We are working on that basis. Current world events, and allies' commitments, show that defence is not a discretionary spend but a priority."

But there is wriggle room.

Downing St sources say the "shape" of the defence budget is yet to be agreed. So it's possible that spending slows in the next couple of years but is then projected to rise more quickly closer to the 2026 and 2030 milestones. Off the record, defence sources say that this discussion is yet to be had - but that the 2026 target could still be reached even if the budget doesn't rise in real terms before 2024.

All this, of course, underlines how carefully Jeremy Hunt needs to tread to combine cabinet unity with economic credibility.

PM no longer committed to inflation pensions rise

Liz Truss is no longer promising to raising state pensions in line with surging inflation, as she asks ministers to look for spending cuts.

The prime minister said two weeks ago she was "committed" to the triple lock, so payments rise by whatever is higher: inflation (price rises), average earnings or 2.5%.

But her spokesman has now said she was "not making any commitments" on government spending.

A decision on what to do with pensions next year has not been made. The PM's spokesman said she was aware of "how many vulnerable pensioners there are," and protecting the vulnerable was a "priority".

Inflation stands at around 10%, whilst the figure for average earnings is 5.4%.

The Resolution Foundation think tank has estimated raising pensions by earnings instead of inflation would save the government £6bn next year.

Read more here.

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Should she stay or go? - Conservative voters' views on Liz Truss

Our colleagues at Radio 5 Live have been hearing views from people across the UK on Liz Truss's future in government.

Will

Will in York is a Conservative party member but feels the government needs to call a general election so Labour can take over."They've lost all backing from the country and we're so far away from the election win before the pandemic," he says."We need them to lose so the Labour Party have a working majority, so the Conservatives can go away and sort themselves out."

Fellow York resident Sarah is a long-standing Conservative voter who feels it would be "for the good of the country" if they were no longer in government."Liz Truss is an example of just because you want a job, doesn't mean you're up to it." she says."I want us to lose an election badly, so we can re-group and look at what we stand for."

Jess

However Conservative party member, Jess in Edinburgh, thinks it's the wrong time for a general election."We need to give her time," she says, "I think if any of us were judged by the first 30 days in our job, we wouldn't go down in history.""We need to give her time to reach across the party and dip into all the talent we do have and get the country back into the right place."

How high could your energy bills go?

The government said it was reducing the amount of help it will offer with energy bills earlier this week as part of its reversal of almost everything in September's mini-budget.

What's changing?

The government previously said annual energy bills for households using a typical amount of gas and electricity would be £2,500, for two years - but now the energy price guarantee will end in April 2023. So, only this winter will be covered.

What happens after April will depend on the outcome of a Treasury-led review, but the chancellor said there would be "a new approach" targeting those in the most need.

How much will you pay?

Average household bills had been expected to rise to £3,549 a year before the government set the new maximum charges - around £1,000 more than under the energy price guarantee.

So what happens when it ends? That depends on what suppliers charge per unit of energy.

Predictions from consultants Cornwall Insight suggest that, for households that not receiving any support, a typical annual energy bill could be £4,347 in the spring, dropping to £3,722 next winter, while the Resolution Foundation forecast average bills could rise to £4,000 and Auxilione predicting a higher figure of £5,000 come April.

However, most households aren't typical, and your bill depends on how much energy you actually use.

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We will see you in court, TUC leader warns government

TUC leader warns government over changes to strike laws

The head of the Trades Union Congress - the umbrella group for the UK's major unions - has said it is ready to take on the government over workers' rights.

Frances O'Grady, who was giving her final speech as TUC leader, said Business Secretary Jacob Rees-Mogg wanted workers' rights derived from EU laws to be "stripped from the statute book" including holiday pay, parental leave and limits on safe working hours.

She called government plans to change ballot thresholds for industrial action "a cynical move to distract from the chaos" and told delegates the TUC had taken legal counsel, which proved, she said, that the government was breaching international law.

"Read my lips: We will see you in court!" she said, to huge applause from the audience.

The government has proposed requiring unions to put pay offers to a member vote before calling a strike and aims to introduce legislation to ensure transport companies maintain a minimum service during strikes.

Read more here.