Chancellor Jeremy Hunt said no government could control the markets but they could give certainty about public finances.

He said the plans he was announcing would avoid uncertainty ahead of the full fiscal plan announcement at the end of the month.

It will deliver confidence and stability, he added.

The chancellor has scrapped plans to cut the basic rate of income tax from 20p in the pound to 19p from April next year.

He said it was not right to borrow to fund this tax cut. The rate will remain indefinitely at 20p until economic circumstances allow it to be cut, he said.

The measure was announced by former chancellor Kwasi Kwarteng in September's mini-budget - he said it would benefit more than 31 million people.

The chancellor is reversing almost all tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation, he has just said in a video statement.

The reason he is announcing these measures is to provide confidence and stablility, the new chancellor said. But he promised to provide fuller details in the Commons later.

Hunt said that the cut to National Insurance would remain, as well as cuts to stamp duty.

But almost everything else is gone.

"We will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates," he said.

Nick Eardley
Chief political correspondent

A source has said it is expected that the government's energy price guarantee will be scaled back by the chancellor.

Universal support is due to last for two years – but the source suggested this was unlikely to remain the case.

The government is not commenting but we'll hear from Jeremy Hunt shortly.

New Chancellor Jeremy Hunt is going to set out another shake-up of the government’s economic plans at 11:15. He is expected to U-turn on more mini-budget announcements.

Here's how it could affect you:

Taxes

National Insurance: This is a tax paid by employees, employers and the self-employed. The cut to NI is expected to survive. The Treasury previously said the change would save nearly 28 million people an average of £330 per year.

Income tax: The basic rate of income tax is set to be cut from 20p in the pound to 19p next April - but this could be on the chopping block today.

Corporation tax: Plans to stop corporation tax from rising next April have already been scrapped in a big U-turn. The corporation tax rate, which is the tax companies pay on their profits, will go up from 19% to 25% in April 2023 after all.

Energy bills

A key part of the mini-budget, which has so far been retained, is the “energy price guarantee” - in place for two years for households and the next six months for businesses. It limits the amount you can be charged per unit of gas or electricity.

The government says the bill for a typical dual-fuel household which pays by direct debit will be £2,500 a year. But you can still pay more - it depends on how much energy you use.

Mortgages

Mortgage rates have been rising - and that trend has accelerated since Kwasi Kwarteng's mini-budget. Analysts are not expecting any big moves in the economic update today to feed through immediately though.

The Bank of England's next decision on interest rates, which guide variable rate mortgages and new fixed deals, isn't due until 3 November, but it has suggested that it may have to raise rates even higher than previously expected.

Stamp duty

The tax that you pay when you buy a property in England and Northern Ireland was cut in the mini-budget - which was supposed to remove 200,000 people from having to pay it at all and saving many others £2,500 in charges.

This has so far been retained but it could also be axed, some reports suggest.

Kevin Peachey
Personal finance correspondent

Mortgage rates have been rising - a trend that was accelerated after the mini-budget.

But brokers say borrowers should not expect the dismantling of that economic statement to feed through to an immediate reversal.

Lenders are likely to play safe, waiting to see how the markets react to the changes, and - critically - what the Bank of England is likely to do with interest rates. Any lender dropping their rates now could also be inundated with demand.

The backdrop is unchanged. Inflation is still high, and the Bank is still expected to tackle that with higher interest rates. Average rates have been unchanged in recent days.

Some of that will already be priced in by lenders, so it may be the case that mortgage rates stop rising significantly, but do not drop much, if at all.

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Image source, Getty Images

A Tory MP who is calling on Liz Truss to step down as prime minister says "it's blindingly obvious that her position is now untenable".

Crispin Blunt, a former prisons minister, was one of three Conservative MPs who said publicly over the weekend that Truss needed to quit.

"If your confidence levels as a prime minister are in single figures, the position is, frankly, irretrievable," he told BBC News.

Prime Minister Liz Truss made a major U-turn on the government's mini-budget on Friday, sacking Chancellor Kwasi Kwarteng - whom she hired to implement her economic vision.

It is likely that the 23 September mini-budget and the changes since will undergo more revisions in a statement from new Chancellor Jeremy Hunt this morning.

Before then, here's an overview of what was in the original mini-budget and what measures have already been scrapped.

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Torsten Bell, chief executive of the Resolution Foundation think-tank, says it's important to understand why the chancellor is acting today.

"It’s not just about bringing forward some tax/spend announcements from 31 October - it’s trying to reduce how many he has to announce full stop," Bell said in a tweet, external.

"The Office for Budget Responsibility won’t have finalised the interest rate assumptions underpinning their government debt interest forecast.

"So pre-announcing tough choices is about hoping that markets reduce rates on government debt [rather than] a smaller fiscal hole to fill on 31 October."

London's stock market has opened higher, which, according to Victoria Scholar, head of investment at Interactive Investor, suggests is a sign of optimism towards the new chancellor.

The FTSE 100 index, which ranks the largest listed companies in the UK, hit a two-year low last week. But this morning it has gained 0.59% (up 40.64 points at 6,899 points).

Housebuilders like Barratt Developments and Taylor Wimpey have seen a boost, as well as the bank Standard Chartered.

The wider FTSE 250 index also rose 0.87%.

As we reported earlier, the cost of government borrowing has also fallen this morning - a sign of confidence in Hunt's decision to speed up the announcement of revised economic and spending plans.

But we'll get more details later and it's worth pointing out that the cost of UK borrowing is still much higher than before Liz Truss and Kwasi Kwarteng's mini-budget on 23 September.

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Image source, PA Media

Damian Green, a former deputy prime minister, says the new chancellor is already beginning to reassure markets and "that means we can hopefully put the past few weeks behind us and start again".

The Conservative MP said it was "apparent" the timing of the tax cuts announced in the mini-budget were "wrong and simply couldn't be accepted by the financial markets".

"[Truss] is a pragmatist and realised the first budget didn't work in spectacular fashion and made sensible view to try something else," he told BBC Radio 4's Today programme.

"Clearly there were issues with explaining the thinking that laid behind the budget and I'm sure the government has learned that lesson."

Green said he wants Truss to lead the Tories into the next general election and it would be "best for the party if we don't have another leadership campaign".

Image source, Getty Images

Sir John Gieve, a former deputy governor for fiscal stability at the Bank of England, says the new Chancellor Jeremy Hunt will have looked at forecasts and seen that the hole in public finances has got worse, and is bigger than people realise.

Gieve says that leaks from the Treasury showed the fiscal gap was nearing £70bn.

"Hunt realised even if he squeezes public expenditure hard he won't be able to square the books doing that," Gieve tells BBC Radio 4's Today programme.

"So he can't afford the sort of tax cuts, even the £25bn, that remain on the table.

"What he decided after Friday was he needed to put some more measures on the table now to give himself two weeks to work out the full package."

He says today could be "a reset moment" where Hunt could step back and start from first principles and scrap everything except for the energy price cap guarantee and national insurance changes.

Image source, Reuters

The Bank of England (BoE) has released a statement confirming that it "ceased all bond purchases on Friday 14 October".

On 28 September, the Bank stepped in to buy government bonds saying its decision was driven by concern over "a material risk to UK financial stability".

Last week - and for the third time since the mini-budget - the BoE said it would buy more government bonds to try to stabilise their price and prevent a sell-off that could put some pension funds at risk of collapse.

Today is the first time the UK government bond market has reopened since the bank's emergency support programme ended on Friday.

"As intended, these operations have enabled a significant increase in the resilience of the sector," the BoE said this morning.

Chris Mason
Political editor

Image source, Reuters

This is a hand-to-mouth government, living hour by hour.

This is the second yanking forward of this statement - or at least parts of it. Originally it was in the diary for November. Then Halloween. Now today.

To be clear, there still will be a statement in a fortnight’s time, alongside those numbers about the state of the economy from the Office for Budget Responsibility.

If you pick up the hint of panic in the air, you’re right too. Make that a stench.

There’ll even be a statement to camera from the chancellor this morning, so nervous are they of the markets that they dare not leave it until mid-afternoon when he’ll stand up in the Commons.

Yesterday the prime minister invited the chancellor and his family to lunch at Chequers. They met for three hours. There was, I’m told, "violent agreement".

Image source, PA Media

One source suggested they are working "in lockstep". That’s the very phrase they used to use about the bloke she blew out of the building on Friday lunchtime.

What we seem to be getting now is shock and awe in reverse - the Big Bang of radical policy ideas blitzed in one go, promised by Liz Truss when she took office - going backwards. Fast.

One source described today as a "down payment" on what the government is now promising. Say whatever we can, as quickly as we can, to reassure the markets.

My sentence not theirs, but that’s the thrust of it. So in details terms, the focus today is likely to be tax. And the focus in a fortnight will be spending.

Even a chancellor moving as fast as this one can’t negotiate detailed cuts across Whitehall over a single Sunday roast. That discussion will start tomorrow in a cabinet meeting.

Remember: this is about two things. Restoring the government’s financial credibility. And propping Liz Truss up in office.

Both remain imperilled and no-one can be quite certain what will happen next.

Image source, Getty Images

A Tory MP says Liz Truss should be commended for bringing "a very seasoned and experienced" cabinet minister back into the fold as chancellor.

"I think Jeremy has shown already in just a few days he has been in office he is getting a grip on the situation and he's not afraid to make difficult decisions to row back on some of the things that have been announced recently," Victoria Atkins told BBC Radio 4's Today Programme.

When asked if she wants to see Truss leading the party into the next election, she replied: "She is the prime minister at the moment. We will not have an election for the next couple of years.

Image source, Reuters

Rishi Sunak’s former adviser Douglas McNeill says the chancellor's statement this afternoon will be a chance for the government to demonstrate a “united front” in the House of Commons.

McNeill, who was Sunak’s adviser during his tenure as chancellor from February 2020 until July this year, told BBC Radio 4’s Today programme: “I think one lingering doubt that arose over the weekend was the fact that Jeremy Hunt wasted no time in burying Trussonomics, good and proper, in his media appearances."

McNeill says there was a bit of a suspicion that Hunt had gone further than the prime minister might have wished him to, adding that today’s announcement is a chance to "dispel this impression".

"He certainly seemed to go further than I thought she did in her press conference on Friday, although that was a relatively brief affair of course, so it was hard to get a full sense of her thinking," he says.

The interest rate – or yield – on UK government bonds fell on Monday morning as markets opened.

It means the cost of government borrowing has come down, meaning financial markets have more confidence in the economic plans.

Today is the first time the UK government bond market has reopened since the Bank of England’s emergency support programme ended on Friday.

Faisal Islam
Economics editor

The surprise move reflects concern about markets for government debt reopening this morning, without the parachute of emergency help from the Bank of England.

The Treasury, under the new chancellor, has decided it cannot wait, and there is no point in waiting to announce a series of measures, from more U-turns to new tax rises and spending cuts.

Only the National Insurance cut seems safe for now, as it is nearly fully legislated.

They should be announced by mid-morning, and then to the Commons this afternoon.

It is extraordinary that a G7 country needs to repeatedly manage the expectations of sceptical markets in this way.

But the new chancellor is keen to show the markets the government knows what it needs to do to win back economic credibility, and that in political terms too, that he is in control of events.

The very early response showed sterling up. We await the formal opening of the gilt market. But there might not be much left of the now notorious mini-budget by this afternoon.

Nick Eardley
Chief political correspondent

Firstly, the new chancellor wants to calm the markets.

By setting out more of his economic strategy today, he will hope to do that. This won’t be the full medium-term plan - but it will be the government saying its old plan is dead.

Secondly, the government wants time in Parliament.

There is no shortage of plotting among Conservative MPs - a growing number wants the prime minister out as soon as possible.

But if today provides some stability in the economy, might more be prepared to wait until the end of the month?

That’s the calculation. But as we’ve seen in the past three weeks, the government is not in full control of events.

It can’t be certain it will work.

The Director of the Institute for Fiscal Studies (IFS), Paul Johnson, welcomed the chancellor bringing forward measures from the government's debt plan, saying there was "a need to get a grip on public finances" and go further than reversing some of the tax cuts announced in the mini-budget.

Referencing the chancellor potentially fast-tracking tax measures, Johnson says: "If all we get is delay of 1p off income tax to when it was supposed to be in a couple of years' time, I'm not clear how that helps.

"It may be that is reversed altogether and is therefore even tighter than Rishi Sunak was intending to be."

On spending cuts, Johnson says he would be surprised if the new chancellor had a chance to say anything terribly convincing.

"He might come out and say: 'My intention is to save a certain amount of money' - that's difficult to be very credible about until you've identified where you're going to do it.

"He could identify that he's not going to increase benefits in line with prices, and that would be a very big and very controversial thing to do."

He says the IFS calculated that public spending needs to fall by £60bn to put the country's finances on a sustainable path.