This morning was already being considered a key test of whether investors believe the government’s latest economic plans are credible following a policy U-turn on corporation tax by Liz Truss on Friday.
The volte-face didn’t have the immediate desired effect. When the markets closed last week, the cost of government borrowing was creeping back up.
It was approaching the level at which the Bank of England was recently forced to make an intervention in the bond market that was designed to prop up investments held by pension funds. The pound also lost ground late on Friday.
The Bank made clear that its emergency scheme - which involved committing to buying government debt - would not continue beyond Friday, making today another key test.
With the installation of Jeremy Hunt as chancellor, pundits say so-called “Trussonomics” has been killed off. Now he's moved early to reassure markets before they open, with an announcement about an announcement later today.
But some economists warn that these developments still might not be enough to restore the UK's credibility.
Getty ImagesCopyright: Getty Images
Fast-tracking measures is evidence of panic, says Labour
Labour's shadow chief secretary to the Treasury says the fact chancellor is bringing forward measures from the debt plan is "evidence of the panic in government".
Pat McFadden says: "The reason [Hunt] is doing this is because ministers are terrified of what happens when markets open this morning.
"It's testament how much chaos has been caused by Liz Truss since she became prime minister," he tells BBC Breakfast.
He questions whether Truss believes in the policies that were announced in September's mini-budget or "ones being forced on her by this situation".
He welcomes the fast track of tax and spending measures, saying: "Anything that stops the damage is of course important because people are paying the price for what the prime minister and the previous chancellor did.
"The ones who caused all this damage can't be the ones to fix it, they've run out of road."
He reiterates calls for the prime minister to address the Commons today to "answer questions she couldn't in that eight-minute press conference last Friday".
'Wise move' from Hunt, says senior Tory MP
Getty ImagesCopyright: Getty Images
The chair of the Treasury Select Committee says Jeremy Hunt has had a "strong start" as chancellor ahead of his statement later today.
Tory MP Mel Stride, who said last week that a "significant" U-turn on the mini-budget was needed, said Hunt "gets what needs to be done and is acting fast".
"Surprising markets positively on the upside with an early statement to [the] House of Commons
today is a wise move," Stride tweeted.
"Message is ‘we get what needs to be done and it’s being sorted'."
Pound gains as chancellor moves to reassure markets
The pound added to gains on Monday morning as new Chancellor Jeremy Hunt moved to reassure markets.
Sterling was up around 0.7% to trade above $1.12.
BBCCopyright: BBC
Government hoping quick intervention will stabilise economy
Nick Eardley
Chief political correspondent
The government has decided it needs to act today - not wait two weeks as it has planned.
The prime minister and chancellor held talks yesterday at Chequers, where details of what we’ll see this morning were discussed.
Other elements of the mini-budget could well be junked by this evening.
In particular, it’s widely thought the cut to income tax next year could be scrapped to try and plug the black hole the government is facing.
This is designed to reassure the markets before trading opens in the UK.
Downing Street will be hoping today shows they are going to act quickly to stabilise the economic situation.
The problem the prime minister has is that a large number of her own MPs think she’s responsible for the current turmoil.
BreakingHunt to reveal details of fiscal plan
PA MediaCopyright: PA Media
Chancellor Jeremy Hunt will make a statement later today where he is expected to set out how the government will pay for the plans set out in the mini-budget.
He will bring forward "measures from
the Medium-Term Fiscal Plan", in a statement in the House of Commons.
The chancellor and Prime Minister Liz Truss have been speaking over the weekend following her announcement of a U-turn on corporation tax on Friday. It also follows the sacking of Hunt's predecessor Kwasi Kwarteng on the same day.
The full details of the Medium-Term Fiscal Plan are due to be released on 31 October.
BreakingHunt to announce more mini-budget U-turns today
Faisal Islam
Economics editor
The chancellor is to fast track to today many billions of pounds worth of tax and spending
measures from the debt plan, announcing them a fortnight earlier than expected.
It is the second time
the date of further details have been brought forward, and it will be the
latest in an abrupt series of U-turns on the policies announced in the
mini-budget just over three weeks ago. Pulling the announcements forward from
the planned 31 October date of the medium term fiscal strategy is designed
to help reassure jittery markets before they open here this morning.
The announcement of
the £18bn U-turn on corporation tax on Friday, and the firing of former
chancellor Kwasi Kwarteng, did not calm rising UK government borrowing
costs.
Yesterday, new
Chancellor Jeremy Hunt told the BBC that nothing was off the table.
Announcements by lunchtime and then a statement to the House of Commons will
see many billions more in reversals of policy, to plug a hole in borrowing forecasts
worth tens of billions.
The delay of the plan to cut the basic rate of income
tax to 19p in April is widely expected. The cut to National Insurance is
expected to survive, as it has already very nearly passed through Parliament.
More clarity on the extent of savings in public sector spending could also be
on the cards.
The Treasury has just
confirmed that the measures brought forward from the debt plan “will support
fiscal sustainability”.
Markets will reopen
shortly in the UK without support from Bank of England emergency purchases of
government borrowing. This will be a key test. Today’s moves, which could
amount to a significant fiscal event in and of itself, is designed to reinject
market confidence.
Analysis
How long can Truss last at No 10?
Nick Eardley
Chief political correspondent
Some MPs in the Conservative Party feel close to giving up, and after weeks of market turmoil and political chaos the mood is bleak.
"It's done... we can't win," volunteered one minister, a Truss believer, who has been dusting off their CV, accepting they will lose their seat whenever a general election comes.
The debate in the past 72 hours has been how long Liz Truss can survive in Downing Street. A small number of Conservative MPs have now called publicly on the prime minister to go. More could well follow soon.
In conversations with the BBC over the weekend, many others argued the PM would have to leave office before the next election. Some believed she could hang on for a few more months. But an increasing number argue she has weeks or even days left - even though there's no clarity on how that would come about or who would take over.
One former cabinet minister concluded: "People know that this is over - it's a question of how and when."
The papers: Truss’s ‘game is up' as plots to oust PM ‘thicken’
Today’s headlines are dominated by what the papers are calling Liz Truss’s fight for her political survival.
There are also reports of the newly-released review of the Met Police, which finds that hundreds of officers have been getting away with breaking the law and misconduct. The review into the force's misconduct procedures - carried out by Baroness Louise Casey - was ordered following the murder of Sarah Everard by a serving officer.
Let’s take a look at some of the main stories.
.Copyright: .
Leading with what’s been the story of the weekend, the Guardian writes that Liz Truss is “fighting for her political survival” after veteran Tory MP Crispin Blunt broke ranks to declare the prime minister's “game is up”. Ministers are “waiting anxiously” for the markets to open this morning, the paper notes, to see whether Truss's decision to sack her former chancellor, Kwasi Kwarteng, has paid off.Image caption: Leading with what’s been the story of the weekend, the Guardian writes that Liz Truss is “fighting for her political survival” after veteran Tory MP Crispin Blunt broke ranks to declare the prime minister's “game is up”. Ministers are “waiting anxiously” for the markets to open this morning, the paper notes, to see whether Truss's decision to sack her former chancellor, Kwasi Kwarteng, has paid off.
.Copyright: .
Beginning a trend on today’s front pages, the i headlines on “challenges” the prime minister faces going into this week. The paper claims “multiple MPs” have told it they think a “formal challenge” against Truss could break out in a matter of days. Others are willing to wait until new Chancellor Jeremy Hunt delivers his medium-term fiscal plan on 31 October, it adds.Image caption: Beginning a trend on today’s front pages, the i headlines on “challenges” the prime minister faces going into this week. The paper claims “multiple MPs” have told it they think a “formal challenge” against Truss could break out in a matter of days. Others are willing to wait until new Chancellor Jeremy Hunt delivers his medium-term fiscal plan on 31 October, it adds.
.Copyright: .
The Metro goes a step further than the i, detailing not just general “challenges” but instead what it reports are the three “thickening” plots to oust Truss from 10 Downing Street. Beside images of the Tory MPs widely tipped to replace Truss - including former leadership rivals Rishi Sunak and Penny Mordaunt - sits a close-up of the PM’s face. She looks concerned. As for the plots, the paper claims either: Sunak and Mordaunt will replace the PM on a “dream ticket”, Defence Secretary Ben Wallace will do the same, or the new chancellor will take the “top job” for himself.Image caption: The Metro goes a step further than the i, detailing not just general “challenges” but instead what it reports are the three “thickening” plots to oust Truss from 10 Downing Street. Beside images of the Tory MPs widely tipped to replace Truss - including former leadership rivals Rishi Sunak and Penny Mordaunt - sits a close-up of the PM’s face. She looks concerned. As for the plots, the paper claims either: Sunak and Mordaunt will replace the PM on a “dream ticket”, Defence Secretary Ben Wallace will do the same, or the new chancellor will take the “top job” for himself.
.Copyright: .
“Britain needs stability, not a soap opera,” Leader of the Commons Penny Mordaunt writes in the Daily Telegraph, signalling she isn’t planning to stage a coup against Truss. Likening the PM’s struggles “to those faced and overcome by Winston Churchill”, Mordaunt warns MPs against rebelling and says the country needs “pragmatism and teamwork”.Image caption: “Britain needs stability, not a soap opera,” Leader of the Commons Penny Mordaunt writes in the Daily Telegraph, signalling she isn’t planning to stage a coup against Truss. Likening the PM’s struggles “to those faced and overcome by Winston Churchill”, Mordaunt warns MPs against rebelling and says the country needs “pragmatism and teamwork”.
Pound moves higher in Asia trading after tax U-turns
There’s been lots of speculation about the opening of today’s markets, following Liz Truss’s decision to go back on her original economic plan and appoint a new chancellor in Jeremy Hunt. Well, here's the first indication of whether it paid off.
Hunt warned over the weekend there would be tax rises and savings in public spending under his supervision - and admitted the government went “too far, too fast” with his predecessor Kwasi Kwarteng’s 23 September mini-budget.
The PM sacked Kwarteng, her long-time political ally, on Friday following the fallout from that economic plan.
Today sees the international financial markets resume trading for the first time since Hunt made his remarks over the weekend.
EPACopyright: EPA
Kwarteng, pictured with Truss at the Tory party conference earlier this month, was sacked by the PM last weekImage caption: Kwarteng, pictured with Truss at the Tory party conference earlier this month, was sacked by the PM last week
Tory MPs level criticism at Truss - while others call for calm
Chancellor Jeremy Hunt has insisted Liz Truss is still in charge of the government, after a series of U-turns left her premiership in jeopardy.
But over the weekend, three Tory MPs publicly voiced doubt that she could survive as PM.
Former minister Crispin Blunt said "the game is up", and it was only a question now of "how the succession is managed".
Andrew Bridgen also claimed she would have to go, telling the Telegraph: "We cannot carry on like this. Our country, its people and our party deserve better."
And Jamie Wallis said Truss had "undermined Britain's economic credibility and fractured our party irreparably".
Former MP and Tory chancellor George Osborne said the PM was unlikely to hang on till Christmas, and was now a prime minister in name only.
However, while some Tory MPs have reportedly opened talks about how to remove her from power, Truss has received the backing of key government figures including cabinet minister Penny Mordaunt.
Mordaunt, who's considered a potential replacement for Truss should things get worse, said it was time for the party to get behind the PM. "Britain needs stability, not a soap opera," she writes in the Telegraph today.
ReutersCopyright: Reuters
House of Commons Leader Penny MordauntImage caption: House of Commons Leader Penny Mordaunt
What happened yesterday?
Sunday was dominated by media appearances from the new chancellor and others, as the political turmoil of the last few weeks continued:
Jeremy Hunt told the BBC he would “leave nothing off the table” when making “difficult decisions” about spending and revising tax cuts announced in last month's mini-budget
Hunt said there would be no return to the austerity seen in the early 2010s – but warned that all government departments would need to find “efficiencies”
Hunt and Truss later met at the prime minister’s country retreat, Chequers, to discuss the government’s updated financial plans that are due to be announced on 31 October
Several Tory MPs publicly cast doubt over Liz Truss's role as PM - with former minister Crispin Blunt saying "the game is up" for Truss, and Andrew Bridgen telling the Telegraph, "we cannot carry on like this"
Welcome back
Getty ImagesCopyright: Getty Images
Strap yourselves in for what is sure to be another busy day in UK politics.
This morning we’re expecting to get more of a sense of whether international investors have confidence in the UK economy - after another major U-turn from PM Liz Truss on a tax-cutting pledge, and the first comments from her new chancellor over the weekend.
Meanwhile, there's continuing dissent from her own MPs.
Make sure to stay on this page as we bring you news, reaction, explanation and analysis.
Live Reporting
Edited by Dulcie Lee and Alexandra Fouché
All times stated are UK
Get involved
What are we expecting today?
This morning was already being considered a key test of whether investors believe the government’s latest economic plans are credible following a policy U-turn on corporation tax by Liz Truss on Friday.
The volte-face didn’t have the immediate desired effect. When the markets closed last week, the cost of government borrowing was creeping back up.
It was approaching the level at which the Bank of England was recently forced to make an intervention in the bond market that was designed to prop up investments held by pension funds. The pound also lost ground late on Friday.
The Bank made clear that its emergency scheme - which involved committing to buying government debt - would not continue beyond Friday, making today another key test.
With the installation of Jeremy Hunt as chancellor, pundits say so-called “Trussonomics” has been killed off. Now he's moved early to reassure markets before they open, with an announcement about an announcement later today.
But some economists warn that these developments still might not be enough to restore the UK's credibility.
Fast-tracking measures is evidence of panic, says Labour
Labour's shadow chief secretary to the Treasury says the fact chancellor is bringing forward measures from the debt plan is "evidence of the panic in government".
Pat McFadden says: "The reason [Hunt] is doing this is because ministers are terrified of what happens when markets open this morning.
"It's testament how much chaos has been caused by Liz Truss since she became prime minister," he tells BBC Breakfast.
He questions whether Truss believes in the policies that were announced in September's mini-budget or "ones being forced on her by this situation".
He welcomes the fast track of tax and spending measures, saying: "Anything that stops the damage is of course important because people are paying the price for what the prime minister and the previous chancellor did.
"The ones who caused all this damage can't be the ones to fix it, they've run out of road."
He reiterates calls for the prime minister to address the Commons today to "answer questions she couldn't in that eight-minute press conference last Friday".
'Wise move' from Hunt, says senior Tory MP
The chair of the Treasury Select Committee says Jeremy Hunt has had a "strong start" as chancellor ahead of his statement later today.
Tory MP Mel Stride, who said last week that a "significant" U-turn on the mini-budget was needed, said Hunt "gets what needs to be done and is acting fast".
"Surprising markets positively on the upside with an early statement to [the] House of Commons today is a wise move," Stride tweeted.
"Message is ‘we get what needs to be done and it’s being sorted'."
Pound gains as chancellor moves to reassure markets
The pound added to gains on Monday morning as new Chancellor Jeremy Hunt moved to reassure markets.
Sterling was up around 0.7% to trade above $1.12.
Government hoping quick intervention will stabilise economy
Nick Eardley
Chief political correspondent
The government has decided it needs to act today - not wait two weeks as it has planned.
The prime minister and chancellor held talks yesterday at Chequers, where details of what we’ll see this morning were discussed.
Other elements of the mini-budget could well be junked by this evening.
In particular, it’s widely thought the cut to income tax next year could be scrapped to try and plug the black hole the government is facing.
This is designed to reassure the markets before trading opens in the UK.
But it’s also about politics; Tory MPs are mutinous and the prime minister’s future hangs in the balance.
Downing Street will be hoping today shows they are going to act quickly to stabilise the economic situation.
The problem the prime minister has is that a large number of her own MPs think she’s responsible for the current turmoil.
BreakingHunt to reveal details of fiscal plan
Chancellor Jeremy Hunt will make a statement later today where he is expected to set out how the government will pay for the plans set out in the mini-budget.
He will bring forward "measures from the Medium-Term Fiscal Plan", in a statement in the House of Commons.
The chancellor and Prime Minister Liz Truss have been speaking over the weekend following her announcement of a U-turn on corporation tax on Friday. It also follows the sacking of Hunt's predecessor Kwasi Kwarteng on the same day.
The full details of the Medium-Term Fiscal Plan are due to be released on 31 October.
BreakingHunt to announce more mini-budget U-turns today
Faisal Islam
Economics editor
The chancellor is to fast track to today many billions of pounds worth of tax and spending measures from the debt plan, announcing them a fortnight earlier than expected.
It is the second time the date of further details have been brought forward, and it will be the latest in an abrupt series of U-turns on the policies announced in the mini-budget just over three weeks ago. Pulling the announcements forward from the planned 31 October date of the medium term fiscal strategy is designed to help reassure jittery markets before they open here this morning.
The announcement of the £18bn U-turn on corporation tax on Friday, and the firing of former chancellor Kwasi Kwarteng, did not calm rising UK government borrowing costs.
Yesterday, new Chancellor Jeremy Hunt told the BBC that nothing was off the table. Announcements by lunchtime and then a statement to the House of Commons will see many billions more in reversals of policy, to plug a hole in borrowing forecasts worth tens of billions.
The delay of the plan to cut the basic rate of income tax to 19p in April is widely expected. The cut to National Insurance is expected to survive, as it has already very nearly passed through Parliament. More clarity on the extent of savings in public sector spending could also be on the cards.
The Treasury has just confirmed that the measures brought forward from the debt plan “will support fiscal sustainability”.
Markets will reopen shortly in the UK without support from Bank of England emergency purchases of government borrowing. This will be a key test. Today’s moves, which could amount to a significant fiscal event in and of itself, is designed to reinject market confidence.
How long can Truss last at No 10?
Nick Eardley
Chief political correspondent
Some MPs in the Conservative Party feel close to giving up, and after weeks of market turmoil and political chaos the mood is bleak.
"It's done... we can't win," volunteered one minister, a Truss believer, who has been dusting off their CV, accepting they will lose their seat whenever a general election comes.
The debate in the past 72 hours has been how long Liz Truss can survive in Downing Street. A small number of Conservative MPs have now called publicly on the prime minister to go. More could well follow soon.
In conversations with the BBC over the weekend, many others argued the PM would have to leave office before the next election. Some believed she could hang on for a few more months. But an increasing number argue she has weeks or even days left - even though there's no clarity on how that would come about or who would take over.
One former cabinet minister concluded: "People know that this is over - it's a question of how and when."
Read Nick’s thinking in full here.
The papers: Truss’s ‘game is up' as plots to oust PM ‘thicken’
Today’s headlines are dominated by what the papers are calling Liz Truss’s fight for her political survival.
There are also reports of the newly-released review of the Met Police, which finds that hundreds of officers have been getting away with breaking the law and misconduct. The review into the force's misconduct procedures - carried out by Baroness Louise Casey - was ordered following the murder of Sarah Everard by a serving officer.
Let’s take a look at some of the main stories.
Read the full round-up here.
Pound moves higher in Asia trading after tax U-turns
There’s been lots of speculation about the opening of today’s markets, following Liz Truss’s decision to go back on her original economic plan and appoint a new chancellor in Jeremy Hunt. Well, here's the first indication of whether it paid off.
The pound moved higher in early Asia trade, with sterling gaining around 0.5% to trade above $1.12.
Hunt warned over the weekend there would be tax rises and savings in public spending under his supervision - and admitted the government went “too far, too fast” with his predecessor Kwasi Kwarteng’s 23 September mini-budget.
The PM sacked Kwarteng, her long-time political ally, on Friday following the fallout from that economic plan.
Today sees the international financial markets resume trading for the first time since Hunt made his remarks over the weekend.
Tory MPs level criticism at Truss - while others call for calm
Chancellor Jeremy Hunt has insisted Liz Truss is still in charge of the government, after a series of U-turns left her premiership in jeopardy.
But over the weekend, three Tory MPs publicly voiced doubt that she could survive as PM.
Former minister Crispin Blunt said "the game is up", and it was only a question now of "how the succession is managed".
Andrew Bridgen also claimed she would have to go, telling the Telegraph: "We cannot carry on like this. Our country, its people and our party deserve better."
And Jamie Wallis said Truss had "undermined Britain's economic credibility and fractured our party irreparably".
Former MP and Tory chancellor George Osborne said the PM was unlikely to hang on till Christmas, and was now a prime minister in name only.
However, while some Tory MPs have reportedly opened talks about how to remove her from power, Truss has received the backing of key government figures including cabinet minister Penny Mordaunt.
Mordaunt, who's considered a potential replacement for Truss should things get worse, said it was time for the party to get behind the PM. "Britain needs stability, not a soap opera," she writes in the Telegraph today.
What happened yesterday?
Sunday was dominated by media appearances from the new chancellor and others, as the political turmoil of the last few weeks continued:
Welcome back
Strap yourselves in for what is sure to be another busy day in UK politics.
This morning we’re expecting to get more of a sense of whether international investors have confidence in the UK economy - after another major U-turn from PM Liz Truss on a tax-cutting pledge, and the first comments from her new chancellor over the weekend.
Meanwhile, there's continuing dissent from her own MPs.
Make sure to stay on this page as we bring you news, reaction, explanation and analysis.