Penny Mordaunt now questions what is so important that would delay such an urgent statement.

The decision taken by the PM was difficult both politically and personally, but she has made it in the national interest, she says,

"She did not hesitate to do so, because her focus is on the wellbeing of every one of our citizens," Mordaunt says.

She says it was the right thing to do and took courage for Truss to make this decision.

"In contrast, Starmer's actions took no courage or judgement or regard for the national interest," Mordaunt says.

Back to Penny Mordaunt who jokes back at Sir Keir Starmer saying she is "quietly confident the leader of the opposition will not have his 15 minutes as prime minister".

She says questions raised on economic policy will be deferred to the chancellor.

Starmer says there is a "vacuum of leadership" and asks: "How can Britain get the stability it needs when all government offers is grotesque chaos?"

"The PM has no mandate from her party or from the country," Starmer says.

Keir Starmer tells the House now is time for leaders to lead.

He asks where is the prime minister is now.

"The lady is not for turning... up", he says, adding now is the time to be honest about mistakes made.

He says the PM has sacked her chancellor, but hasn't explained why.

Sir Keir Starmer has taken to the dispatch box and jokes by saying "everyone in the Tory government gets to be prime minister for 15 minutes".

He notes that the UK is in an economic crisis "made in Downing Street" adding that there is long-term damage which "can't be undone".

"Once a car has been crashed at 100mph it can't be undone and the insurance is higher," he says.

Mordaunt continues: "The overriding priority is to restore financial stability in face of volatile global conditions. We will take whatever tough decisions are necessary and have made changes to the growth plan".

She says the Chancellor will share the plan as soon as the question is over.

The prime minister is detained on urgent business, Penny Mordaunt tells the House.

"I'm afraid you will have to make do with me," she tells the Speaker.

Labour leader Keir Starmer puts his urgent question to the PM, asking if she will make a statement on the replacement of the chancellor of the exchequer during the current economic situation.

Penny Mordaunt, the leader of the Commons, is due to respond shortly to an urgent question from Labour about the sacking of the former chancellor Kwasi Kwarteng.

Stay with us for updates.

UK government borrowing costs stayed lower this afternoon as investors welcomed the reversal of almost all tax measures set out in the mini-budget.

The statement by Chancellor Jeremy Hunt saw the interest rate - or yield - on UK government bonds fall, making government borrowing less expensive.

The yield on bonds due to be repaid in 30 years' time slid to 4.33%.

Meanwhile, the yield on bonds due to be repaid in five years' time, which underpins the cost of new five-year fixed rate mortgages, also fell, to 3.88%.

The drop in yields suggests financial markets are welcoming the changes to economic plans.

There will be more painful medicine to comepublished at 15:12 British Summer Time 17 October 2022

15:12 BST 17 October 2022

Faisal Islam
Economics editor

The response of government borrowing markets and currency markets shows that U-turns are beginning to work.

The patient has been stabilised, but there is more painful medicine to come.

There could be cuts to the real value of benefits and tax credits, and squeezes on spending in government departments at a time they are already under pressure from post-pandemic backlogs.

And the restriction on the energy help package from April could expose some households to a typical bill of £3,500.

Companies find policy announcements - such as changes to freelance payrolls systems and low corporation tax cuts - abruptly abandoned.

Even given all this, further tax rises will be required. It is the polar opposite policy strategy to that pursued by the government.

After Jeremy Hunt buried Trussonomics at the weekend, the coffin has now been sealed.

It should help regain economic credibility. But it is such a political volte-face that one wonders if the whole cabinet, government and Conservative party will support it.

Iain Watson
Political correspondent

A critic of PM Liz Truss said the meeting between Jeremy Hunt and MPs had gone very well.

“It was like having all these anxieties, then you go in, see a psychotherapist and it's cured,” they told me.

Hunt was very calm and there was a confidence he could “sort out the mess”, they said, adding that he had to be given time to do so.

However, they said what happened to Truss was up to the 1922 Committee of Tory backbenchers.

A former minister said demands were being made of Truss if she wanted continuing support and for them, that was not backtracking on the pledge to increase defence spending to 3% of GDP.

A senior Tory backbencher has claimed the Conservative Party would not even be in the opposition if there was a general election tomorrow.

Sir Charles Walker, the former vice-chairman of the 1922 Committee of MPs, has said there is "no sugar-coating" the fact that Liz Truss is in "an enormously difficult position".

"I think if there was a general election tomorrow, which of course they won't be, we'd be a smaller party than the SNP, we wouldn't even be the party of opposition, and that's bound to concern colleagues," he told BBC Radio 4's World at One programme.

"I think the prime minister's position is enormously precarious... I think when you're in this sort of position, you have to expect as a prime minister that the party won't tolerate it for any length of time, certainly not weeks."

While not backing a candidate to replace the prime minister, he said: "The current chancellor has been greeted favourably by the markets, by the media and by colleagues."

Image source, EPA

Over the weekend, US President Joe Biden weighed in on the UK's economic and political turmoil, labelling Liz Truss's original plan as a "mistake", adding it was "predictable" that she would have to backtrack.

Elsewhere, there has been more reaction from around the world:

• EU's economy chief Paolo Gentiloni said there was a "lesson to learn" from what is happening in the UK
• The Irish Independent, external in its editorial said the prime minister bought herself some time by changing chancellor
• The Chinese state-run news agency China News Service said: "The outside world does not seem optimistic about the turnaround of the Truss government"
• In another editorial, the Indian daily newspaper The Hindu said the UK was becoming a "cautionary tale" about the effect of "bad politics"

Read more world reaction here.

Reality Check

One of the key parts of Chancellor Jeremy Hunt’s announcement was that the government’s energy bill support scheme will now only run until April 2023 in its current form.

It was previously announced that it would run for two years, keeping a typical household energy bill at £2,500 until 2024, covering both winter 2022 and 2023.

Instead, there will be support until the spring and then a review of what to do after that.

This is in line with Labour’s policy, which Liz Truss criticised in Parliament as recently as 12 October, saying: “We have taken decisive action to make sure that people are not facing energy bills of £6,000 for two years. We remember that the opposition are only talking about six months.”

Image source, Getty Images

The FTSE 100 index, which ranks the biggest listed companies in the UK, is now up 0.91%, or by 62 points at 6,921. The broader FTSE 250 index has also jumped 2.24%.

Some of the companies to see the biggest boost to their share price this morning include housebuilders Barratt Developments, Persimmon and Taylor Wimpey.

Some analysts have suggested this is in part due to relief among investors that the cut in stamp duty is not being scrapped.

The change in the threshold of how much a property has to cost before stamp duty is paid from £125,000 to £250,000 will remain.

First-time buyers will pay the tax on properties costing more than £425,000. Discounted stamp duty for first-time buyers will apply up to £625,000.

Homebuyers in London and the South East of England will benefit the most from the measure, according to property search website Zoopla.

Sterling extended gains against the dollar, and was trading at $1.13 after the chancellor ripped up the prime minister's tax-cutting plan that had spooked the financial markets.

It had slumped to a record low of $1.03 after the mini-budget in September and the cost of government borrowing rising sharply in its aftermath.

You can track the progress of the pound below.

Read more: Pound rises as chancellor moves to calm markets

Image source, .

"Can we breathe a sigh of relief? No, but we can stop gripping the side of the chair."

This is how personal finance expert Martin Lewis has reacted to the announcement made by Chancellor Jeremy Hunt on the mini-budget and what it means for ordinary people.

He tells Radio 5 Live’s Naga Munchetty he hopes the chancellor has brought back a "level of stability", but says the country "can’t rest on our laurels”.

Describing what he expects to happen from April 2023, when the government's energy price guarantee comes to an end, he says: “One presumes we will go back to the energy price cap system alongside targeted support."

Despite the plans announced by the chancellor, Lewis says: “Many people in the country are still looking at difficult times in order to balance their personal budgets.

"We need to continue to press hard in order to make sure we get through this," he adds.

You can listen to more from Martin Lewis on his podcast on BBC Sounds.

Jenny Kumah
BBC South West England Correspondent

Image source, Andy Alcroft/BBC

Tavistock is in the true blue seat of West Devon and Torridge. The Local MP Sir Geoffrey Cox has the biggest conservative majority in Devon.

But there was plenty of disillusionment with the present government from people I spoke to here, although some feel the prime minister needs to be given a chance.

Conservative voter Wilma Miners says: "It's not what I signed up for. I was very hopeful when Liz Truss became prime minister. But now I'm not too hopeful.”

But Wilma feels that Jeremy Hunt, the new chancellor, could be "quite a useful companion” for Truss.

Image source, Andy Alcroft/BBC

Sam Ulhaq votes Green and runs a coffee van.

She welcomes Hunt’s reversal measures, but says: “I don’t have the heart to vote any more because I think once they get into power, their promises change.”

Michael VanKan, who runs a bread stall in the town, says he's happy Hunt has “come in to sort things out”.

He also feels the prime minister needs to be given more of a chance. Michael adds he would normally vote Conservative, but is now undecided.

Image source, Andy Alcroft/BBC

Nick Eardley
Chief political correspondent

The prime minister will not be answering Keir Starmer’s urgent question in the Commons later.

Instead, the government will send the Leader of the Commons Penny Mordaunt.

The PM isn’t compelled to attend. Senior ministers often send others to answer these questions.

But some Conservative MPs also want to hear from the prime minister today.

Her government has just junked its economic strategy – the fact the prime minister has no public statements planned will raise a few eyebrows.

A labour source described the PM as “frit”.