Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Guardian - UK
The Guardian - UK
Politics
Harry Taylor, Andrew Sparrow and Léonie Chao-Fong

Kwasi Kwarteng reportedly believes Liz Truss ‘only has a few weeks’ – as it happened

Kwasi Kwarteng Liz Truss United Kingdom Greg Hands Office for National Statistics United States

Summary

Here’s a roundup of today’s news, as Liz Truss sacked Kwasi Kwarteng after he returned from an IMF summit in the US, and appointed Jeremy Hunt in his place. Truss then gave a press conference which has not gone down well with Conservative MPs.

  • Liz Truss sacked Kwasi Kwarteng, a key ideological ally in the Conservative party, making him the second-shortest serving chancellor in modern history.

  • Kwarteng is said to think that his sacking will only buy Truss “a few weeks” in the job, according to reports in the Times.

  • Truss announced Jeremy Hunt, former health secretary who has twice stood for the party’s leadership as Kwarteng’s replacement.

  • Corporation tax will now be raised to 25%, a cut to 19% had been pencilled in. Truss then refused to apologise during a press conference.

  • Labour leader Sir Keir Starmer has called for a general election as the government “is at the end of the road”.

  • There are discussions between senior members of the 1922 Committee of Conservative party backbenchers set to take place this weekend, about Truss’ leadership. There are rumours that there has been a “substantial number” of letters sent in to the committee calling for a vote of no confidence, Sky News has reported, despite Truss being immune for a year after her election.

  • Former chancellor Philip Hammond has said that the Conservative party under Liz Truss have “thrown away” reputation for “fiscal discipline and competence”.

  • A poll by Savanta/ComRes has found seven in 10 voters say Truss cannot win back their trust. A majority backed Kwarteng’s sacking. Another poll found support for a general election, including among Conservative voters.

  • The Daily Mail, one of the staunchest supporters of the Conservative party among the national newspapers has published a highly critical front page for its Saturday edition, asking “how much more can she (and the rest of us) take?”

That’s all for today. Thanks for following along. Tomorrow morning the new chancellor Jeremy Hunt will take to the airwaves, his first broadcast interviews since his appointment. He will get the round underway with an interview on LBC at 7am.

Until then, I leave you with our story that Truss’ premiership is “hanging by a thread” after a chaotic Friday.

Kwarteng: 'Sacking has bought Truss a few weeks'

More on that Times piece, which the newspaper has splashed on for tomorrow morning’s edition.

It says that Kwasi Kwarteng, who was Liz Truss’ chancellor until Friday lunchtime and a key ideological ally believes his sacking and her reversing her budget has only bought her a few weeks.

The article reports that Truss told Kwarteng he had to go to restore market confidence.

A source told the Times: “Kwasi thinks it only buys her a few more weeks,” a source said. “His view is that the wagons are still going to circle.”

Even inside Downing Street senior officials believe it is a matter of time before she is forced out of office. “Senior civil servants are now openly talking about her going,” one Whitehall source said. “They think she’s had it.”

Round-up of Saturday's front pages

We’re starting to get some of Saturday’s front pages being published. As you might expect, they all focus on Liz Truss’ battle to stay as prime minister and the sacking of her chancellor Kwasi Kwarteng on Friday.

Probably the starkest for Truss and the Conservative party is the Daily Mail, a normally staunchly loyal Tory newspaper.

It asks “After another day of barely believable Tory chaos … how much more can she (and the rest of us) take?

The Guardian has gone with a front page that spells out the chaos of Friday.

The Times says that Truss “fights for survival” as Britain faces a financial “storm”. Its lead article suggests that Kwarteng believes that Truss has bought herself “a few weeks” by sacking him and reversing the corporation tax cut.

The Daily Telegraph is less forthright than the Daily Mail, saying instead that Truss “clings to power” after sacking Kwarteng.

Here’s the i, which has a front page about Conservative MPs telling Truss she should resign.

The Financial Times says that Truss’ economic strategy has been “shredded after U-turn on corporation tax”.

The Labour party has published a campaign video in the aftermath of Liz Truss’ press conference on Friday afternoon, which focuses on the impact on the economy of her policies since becoming prime minister.

The Welsh secretary, Sir Robert Buckland has defended Liz Truss, telling his party that it should not throw another leader “to the wolves” and denied her position was untenable.

Appearing on BBC Radio 4’s Any Questions programme in Gloucester, he said: “This has been a very difficult political week, I’m not going to shy away from that, but do I think that means her position is untenable? No, I do not.”

Sir Robert was openly laughed at by the audience, as he told the programme: “I am not going to deny it is a difficult situation, I am not going to deny it at all.”

Asked why Kwasi Kwarteng had to go, but not Truss, he said: “We’ve seen before with previous governments where a chancellor has been particularly identified with a policy, which hasn’t worked out, the history is littered with a number of examples where chancellors have moved on. Prime ministers haven’t necessarily suffered the same fate.

“I think if we start with gay abandon, throwing another prime minister to the wolves, we’re going to be faced with more delay, more debate, more instability, exactly the opposite of what I think we all need as we go into this winter.

“The last thing we need is another internal party debate.”

Welsh Secretary Sir Robert Buckland said that a general election now would not be a good idea, but admitted that the change in leader had made the issue “more glaring”.

“There will be an election in the normal run of things and the people of our country will be able to make their decisions and make up their minds. I think that that is a perfectly normal course to run,” the cabinet minister said during an appearance on BBC Radio 4’s Any Questions programme.

“Another leader does make that question about a general election a much more glaring one I accept, but I do not think that now is the time for more delay that inevitably an election campaign will cause.”

Jeremy Hunt is doing a broadcast round on Saturday morning as the Conservative party attempts to reset Liz Truss’ premiership.

Hunt will be appearing on LBC at 7am, before speaking to Sky News at 7.30am.

The new chancellor will then be interviewed on BBC Breakfast at 8.30am.

This from Telegraph political editor Christopher Hope, who has said that the 1922 committee will hold talks this weekend about Liz Truss’ leadership.

As reported earlier Sir Graham Brady, who is the chairman of the body that governs the parliamentary Conservative party, is in Athens – but senior members are hoping to hold a conference call of its executive tomorrow or on Sunday.

According to Hope, the idea of changing the committee’s rules to allow a challenge against Truss is not on the table. The regulations mean that a leader is immune from a no confidence vote for a year after their election. Instead it would discuss “what needs to happen to assist her to get back to a sensible level of support", one MP has told him.

Some reaction from across Europe, including the German state broadcaster ZDF which has called the situation in the UK “insanity on the island”.

An article by ZDF said former Conservative finance ministers are “wondering how on earth their country became an international laughing stock”.

French newspaper Le Monde has said Liz Truss is “adrift” after sacking Kwasi Kwarteng and appointing Jeremy Hunt.

It points out to readers across the English channel that to find another period where the government went through so many chancellors, you have to look back to 1834.

Meanwhile in a long-read published in English looking at the state of the country, the monthly French newspaper Le Monde Diplomatique said that Britain is “a country splitting apart”. Journalist Jamie Maxwell writes: “beneath the veneer of national consensus after the death of a monarch, Britain’s fissures are deepening.”

Italian newspaper Corriere Della Serra called events on Friday a “political earthquake” and says that the government’s credibility and economic competence is now in question.

La Repubblica said the UK is “more unstable than Italy” and said Brexit was part of the origins of “the Truss disaster”.

Across in Spain, a piece in El Pais refers to the replacement of Kwasi Kwarteng with Jeremy Hunt as “From Mr. Hyde to Doctor Jekyll”.

International trade secretary Kemi Badenoch has said that Liz Truss has her “full support”.

Badenoch came 4th in the Conservative party leadership contest earlier this year, and was eliminated during rounds of voting by MPs before it went to members.

She has tweeted: “To say it’s been a difficult day would be an understatement. We knew the scale of the challenge this autumn given multiple global headwinds would be unprecedented. Our Prime Minister is working flat out to get the country through these turbulent times. She has my full support.”

Here’s a photo of Liz Truss meeting Jeremy Hunt in the cabinet room at 10 Downing Street earlier today, as she appointed him chancellor.

Liz Truss sits across from Jeremy Hunt at the cabinet table at 10 Downing Street, London on the day she appointed him chancellor of the exchequer.
Liz Truss sits across from Jeremy Hunt at the cabinet table at 10 Downing Street, London on the day she appointed him chancellor of the exchequer. Photograph: Andrew Parsons/No10 Downing Street

More polling news – Channel 4 has reported in its evening bulletin that 61% of people who responded to a poll run by Find Out Now think there should be a general election.

In a survey carried out since Liz Truss’ press conference this afternoon, 64% of the 2,661 polled, think the prime minister should resign. That includes a majority of Tory voters also think so.

Sky News’ political editor Beth Rigby is currently speaking on the news channel, and says that from those inside the Conservative party that she has spoken to, it’s a case of “when, not if” Liz Truss will leave her job as prime minister.

In terms of her survival, what we saw today was the last throw of the dice for her to try and survive from a Downing Street perspective, her supporters saying Jeremy Hunt being supportive buys her time … that is the optimistic view.

A lot depends what happens in the markets in the coming days. If things don’t settle, and it’s made harder by this sense of ongoing political crisis, then she could be in real trouble.

Regardless of the optimism and hope from her team, every single MP, cabinet minister, former cabinet minister or former minister I have spoken to today, they all say it’s a question of when not if she has to go. I am just reporting dozens of conversations that I have had today with people.

In fact in the past few minutes a Tory source has told me that a substantial amount of letters calling for her to have a vote of no confidence, saying they have lost confidence in her, have gone in to Graham Brady.

Brady is the chairman of the 1922 Committee which governs the parliamentary Conservative party and is currently away in Athens. Truss is unable to be challenged for a year due to current rules, but Rigby speculates that those rules may change.

Here’s a summary of the reaction in the markets by my colleagues Alex Lawson and Kalyeena Makortoff, as sterling fell, the FTSE 100 lost recent gains and bond yields rose in the wake of a day where Kwasi Kwarteng was sacked and Liz Truss’ gave a press conference that failed to inspire confidence.

Liz Truss has failed to quell the turmoil in financial markets as investors attempted to assess the fallout from Kwasi Kwarteng’s sacking.

Sterling fell 1.3% to $1.1188 on a rollercoaster day for the currency. The pound dropped sharply after Kwarteng’s exit from the cabinet was confirmed before recovering some lost ground as Jeremy Hunt was named chancellor.

Investors were then spooked again by the brief press conference given by Truss, sending sterling down after she failed to outline a new policy direction and instead vowed to “see through” what she had promised.

The FTSE 100 made significant gains as news of Kwarteng’s sacking emerged. However, the prime minister’s appearance erased almost all of its advance in afternoon trading, with the blue chip index up just 8 points at 6,858 on the day.

More polls coming out tonight, as YouGov have found that a majority of people support Liz Truss sacking Kwasi Kwarteng. There is not too much difference in the margin between all those surveyed and just those who are Conservative voters who agree with Truss’ decisions. ComRes found the same earlier (see 18:27).

Jeremy Hunt, Truss’ new chancellor, is already starting on the back foot. Nearly 40% of people in the snap poll already think he will do a bad job. Even the Conservative voters who were polled though it was more likely that he would do poorly than well.

Shadow home secretary Yvette Cooper is speaking to Sky News. She backs her leader’s call for a general election.

In her interview she emphasises that the Labour party would have a “grown up approach” contrasting it with the government’s conduct. It is something we have seen more and more in Labour’s messaging in recent weeks, playing on Sir Keir Starmer’s persona.

Liz Truss and Kwasi Kwarteng and the Conservative Party created this crisis and it is still ongoing and it’s not fair on people across this country who are still paying the price. We have got homeowners who are paying hundreds of pounds more each on their mortgages, mortgages they can’t afford because of what this government has done.

A Conservative prime minister has sacked a Conservative chancellor for policies she wanted introducing. Changing the chancellor is not enough, you have to change the government and the whole approach.

It’s another U-turn and it’s another chaotic thing. Every few days we get a U-turn on something they should have done in the first place. They are playing games with people’s future, if they had taken a responsible grown up approach we wouldn’t be in this crisis in the first place. So many U-turns now that the government is spinning. What we need is a responsible grown up approach, that’s what Labour would do.

More from deputy prime minister Thérèse Coffey’s call with Tory MPs earlier.

One Conservative MP has told ITV’s Paul Brand it was “delusional nonsense” from her and other allies of Liz Truss.

Johnny Mercer and other MPs “tried to get the meeting to address the reality of the hole they are in,” according to Brand.

This is Harry Taylor taking over from Andrew Sparrow for the rest of the evening.

William Hague, the former Tory leader, told Times Radio that Liz Truss’s time as PM now “hangs by a thread”. He said:

It’s been a catastrophic episode. And I think it hangs by a thread is the honest answer to your question of her position, because, yes these were her policies too. And plenty of warning was given by many of us about what would happen if we had unfunded tax cuts and whether it would be financially and politically sustainable.

But Hague said he hoped she would survive because having yet another prime minister would be “stretching credibility too far” for the Conservative party.

According to a snap poll by Savanta ComRes, more than half of voters think Liz Truss and Kwasi Kwarteng are equally to blame for the country’s economic situation and 71% say Truss can never regain the trust of the people again.

The Financial Times has calculated that public spending would have to be cut by around £40bn by 2027-28 to meet the government’s goal of getting debt sharing as a proportion of GDP. In an analysis of what Liz Truss said about spending (see 5.20pm), Chris Giles, the FT’s economics editor, says:

Financial Times calculations, which are similar to those from the IFS, suggest that, in 2027-28, the government would have to lower public borrowing by between £50bn and £60bn annually.

Giles says around £18bn will come from the corporation tax increase that is now going ahead, and that the rest would have to come from spending cuts, unless other tax cuts in the mini-budget are reversed.

This FT graphic illustrates the situation well.

Sir Christopher Chope, the Conservative MP and Liz Truss supporter who only last night was saying that she would not do a U-turn on corporation tax (see 4.07pm), told BBC News that his parliamentary colleagues were acting like “a bunch of hyenas”. He said:

If that’s the way my colleagues behave then I can’t stop them, but I think they’re like a bunch of hyenas, frankly.

I think it’s going to be suicide for the Conservative party if we force out another prime minister who is trying to do her best in very difficult circumstances.

We can’t possibly force another prime minister out of office, we’ve just got to calm down and try to give the prime minister our support.

Key event

The Conservative MP Steve Brine, who supported Rishi Sunak in the Tory leadership contest, told Radio’s PM that, following the appointment of Jeremy Hunt as chancellor, “you should see Liz Truss as chairman and Jeremy as chief executive”.

UPDATE: Brine said:

At the end of the day, everybody - detractor or otherwise - should want this government to succeed.

And I know about Jeremy that he won’t be licking his lips at the prospect of becoming chancellor at this time. But this is a moment to be there for the country, and in my experience it’s always been country first, and he will see that as his job right now.

You should see Liz Truss as the chairman and Jeremy Hunt as the chief executive. And I think he’ll be a very effective chief executive and like a new football manager coming in, at the end of the day the supporters are happy when the team is winning.

Updated

Starmer says Britain needs general election now

Keir Starmer has told the Guardian that Britain needs a general election, regardless of whether or not Liz Truss stays or goes. Asked whether there should be a general election, he told my colleague Rowena Mason:

Yes … We are in the absurd situation where we are on the third, fourth prime minister in six years and within weeks we have a got a prime minister who has the worst reputational ratings of any prime minister pretty well in history. Their party is completely exhausted, and clapped out. It has got no ideas, it can’t face the future and it has left the UK in a defensive crouch where we are not facing the challenges of the future because we haven’t got a government that could lead us to the future. For the good of the country we need a general election.

The full story is here.

Jeremy Hunt, the new chancellor, arriving at Downing Street this afternoon.
Jeremy Hunt, the new chancellor, arriving at Downing Street this afternoon. Photograph: Anadolu Agency/Getty Images

Chris Loder, a Conservative MP who has been a firm support of Liz Truss, sounded despondent when he was asked on Radio 4’s PM about his assessment of Liz Truss’s chances. He said:

We’ll see now, won’t we, over the coming days as to what that looks like.

I do hope that the prime minister can continue. But I get the feeling from the parliamentary party and a number of her supporters that is actually quite difficult at the moment.

Loder also said he was “disappointed” by the U-turn on corporation tax.

Updated

Beth Rigby, political editor at Sky News, has more on the negative reaction to the Liz Truss press conference.

Thérèse Coffey, the health secretary, deputy PM and close friend of Liz Truss, hosted a call with Tory MPs this afternoon. According to a Spectator blog by Isabel Hardman, the mood was bleak.

Those on the call said it was ‘like a wake,’ with even Coffey sounding ‘broken.’ ‘You could see the loss in her eyes,’ said one. Coffey reiterated the points the prime minister had made in No. 10, before taking questions.

Hardman says it is now “widely accepted that the abrupt press conference made things worse”.

Truss says public spending to grow 'less rapidly than previously planned'

The main focus during Liz Truss’s press conference was on her confirmation that she will go ahead with the rise in corporation tax announced by Boris Johnson when he was prime minister, and on her overall tone and manner.

But in her opening speech she also confirmed that public spending will be cut. She said:

Our public sector will become more efficient to deliver world-class services for the British people.

And spending will grow less rapidly than previously planned.

This qualifies as another U-turn. Yesterday, when Keir Starmer asked her during PMQs whether she was going to stick to what she said during the Tory leadership contest about “not planning public spending reductions”, she replied: “Absolutely.”

Downing Street never did explain quite what this meant. Government spending plans were set in the spending review of 2021 and under those plans spending was due to rise faster than inflation – but only faster than the measure of inflation used for public spending, not necessarily the CPI measure. Since then inflation has gone up (on both measures), meaning the rises are less generous than they seemed a year ago.

Truss was implying, not just that spending would not be increased to compensate for higher inflation, but that there would be cuts relative to what had been promised. This is from Paul Johnson from the Institute for Fiscal Studies.

Updated

26 political peerages announced as three Tory MPs close to Boris Johnson get knighthoods

Downing Street has announced a swathe of new political peerages. Thirteen new Conservative peers have been appointed, eight Labour ones, one from the DUP, and four who are non-affiliated, or who will sit as crossbenchers. The list was drawn up while Boris Johnson was prime minister, but this is a routine political honours list, not his resignation honours list.

As PA Media reports, Sir Nicholas Soames, the former Tory MP and grandson of Winston Churchill, and Tom Watson, the former deputy Labour leader, are on the list. Others receiving peerages include former Tory MPs Sir Hugo Swire, Stewart Jackson, Angie Bray and Graham Evans, general secretary of the Trades Union Congress of the UK Frances O’Grady and former Northern Ireland first minister Arlene Foster.

Paul Dacre, the editor-in-chief of DMG Media which publishes the Daily Mail and Metro newspapers, was not on the list despite previously being tipped to become a Tory peer.

Three Conservative MPs close to Boris Johnson have also been given knighthoods. They are: John Whittingdale, the former culture secretary who once employed Johnson’s wife Carrie as a special adviser; Jake Berry, the Conservative party chair who was one of the first MPs to campaign for him to become party leader: and James Duddridge, the international trade minister who used to be Johnson’s parliamentary private secetary.

Tory ministers who are supporting Liz Truss are rallying around the prime minister.

Nadhim Zahawi, who until today was Britain’s second-shortest serving chancellor in modern history, has said “it’s time to get moving” behind Truss and Hunt.

Simon Clarke, the levelling up secretary, says Truss has his support.

Steve Baker, the Northern Ireland minister, says he is proud to be part of this government.

Truss’s deputy, Thérèse Coffey, says the PM was right to act to “ensure our country’s economic stability”.

Speaking of Coffey, the Sun’s Kate Ferguson writes that the deputy prime minister has invited the entire Conservative party to a Zoom call “to chat”.

Updated

Paul Johnson, director of the Institute for Fiscal Studies thinktank, says reversing the decision not to raise corporation tax will not by itself fill the gap in the public finances created by the unfunded tax cuts in the mini-budget.

The shadow chancellor, Rachel Reeves, says her newly appointed Tory counterpart, Jeremy Hunt, signs up to the same “trickle down” model of economics as his predecessor which has “resulted in the instability and the insecurity and volatility” that we have seen in the past few weeks.

Reeves said:

Jeremy Hunt, when he ran to be leader of the Conservative party, proposed even bigger cuts to corporation tax than what the prime minister and Kwasi Kwarteng brought in, so the idea that somehow this is a break with the failed trickle-down economics that we’ve seen from the Conservatives in recent weeks is just for the birds.

On whether the removal of Kwasi Kwarteng as chancellor would make any difference, she said:

We’re now on the fourth Conservative chancellor this year, in fact on the fourth Conservative chancellor since July of this year, but the truth is, another change in who is running the Treasury, another Tory chancellor, isn’t the answer to the challenges we face as a country.

Updated

A Leicester council byelection resulted in a huge swing towards the Conservatives. They took the seat from Labour, who were knocked into third place in an area gripped by civil unrest last month.

The Conservatives won 49.6% of the vote in North Evington, with a 32.7-point swing in their favour, while Labour received just 22.5% of votes.

The Green party came second with 25.8% of the vote in a ward that was previously a Labour stronghold. Overall turnout in North Evington, a majority-Asian area dominated by the textiles industry, was 45%.

Some have attributed Labour’s loss to the fact its candidate, Rajul Tejura, was widely reported as supporting India’s Bharatiya Janata party (BJP) government. A picture of her in front of a lifesize cutout of Narendra Modi, at an event she organised to celebrate his election victory in 2019, was shared widely on social media.

Her candidacy was endorsed by the disgraced former Leicester East MP Keith Vaz, who appeared on a number of her campaign leaflets.

Read the full story here:

Updated

The new chancellor, Jeremy Hunt, has arrived at Downing Street to meet Liz Truss.

Hunt was photographed earlier leaving his house in Pimlico, London, on his way to meet the PM.

Jeremy Hunt leaving his home in London.
Jeremy Hunt leaving his home in London. Photograph: Aaron Chown/PA

Updated

Philip Hammond says Tories under Truss have 'thrown away' reputation for 'fiscal discipline and competence'

Philip Hammond, who was chancellor under Theresa May, said the Conservative party under Liz Truss had “thrown away years and years of painstaking work to build and maintain a party of fiscal discpline and competence in government”. The arguments the Tories normally used against Labour on the economy would now look “extremely limp”, he said, in an interview on the World at One.

Updated

Scotland’s first minister, Nicola Sturgeon, said Liz Truss was now a “lame duck prime minister” who “forced” her former chancellor, Kwasi Kwarteng, to “carry the can for her decisions”.

Speaking to BBC News, Sturgeon said:

I think the only decent thing that Tory backbenchers can do now is call time on Liz Truss and this entire UK government, and allow people across the UK to have a general election.

This was beyond a joke, it was never funny, but Liz Truss has already, through her own decisions, crashed the economy and heaped misery on people who were already struggling with the cost of living crisis.

Truss had shown herself to be “completely out of her depth” as PM, she continued. She added:

The sooner she goes and the sooner people get the chance to get rid of this Tory government that is doing so much damage, once and for all, the better.

Updated

Last night the Conservative MP and Liz Truss supporter Sir Christopher Chope told Newsnight that the PM was not going to U-turn on her mini-budget. Asked specifically if there would be U-turn on corporation tax, he replied:

She’s not going to. I would feel that this was a complete betrayal of all that she believes in. Liz Truss is a calm, considered, very clever, intelligent person and she is not going to pursue a policy which is totally inconsistent with her policy of promoting growth and one where promoting growth is by keeping tax low.

Now Chope is saying his party has become a “laughing stock”. This is from Bloomberg’s Emily Ashton.

With her former chancellor and “great friend” Kwasi Kwarteng gone, how long wo;; Liz Truss survive in her position? Will she last longer than a 60p Tesco lettuce? That’s the big question.

The Daily Star has set up a live “lettuce-cam” YouTube feed with a portrait of the PM next to a lettuce wearing googly eyes.

Who do you think has a longer shelf life? Lettuce know (sorry).

(The Daily Star was inspired by the Economist, which earlier this week published an editorial saying that, if you ignore the period set aside for mourning the Queen, Liz Truss had just seven days in control as prime minister – “the shelf-life of a lettuce”.)

Updated

The former Labour leader Ed Miliband has reposted an old tweet by David Cameron in which he said Britain faced a choice between “stability and strong government” with him “or chaos with Ed Miliband”.

Miliband has retweeted Cameron’s 2015 tweet, along with the clown face emoji.

Updated

Here is the full text of Liz Truss’s opening statement at her press conference.

Liz Truss at her press conference.
Liz Truss at her press conference. Photograph: Reuters

The Liz Truss press conference has failed with one of her key audiences, the Conservative parliamentary party, according to reporters taking soundings from MPs. My colleague Pippa Crerar is picking this up. (See 3.35pm.) And other journalists are too.

From the Sun’s Harry Cole

From ITV’s Robert Peston

From Bloomberg’s Kitty Donaldson

From ITV’s Anushka Asthana

From the i’s Paul Waugh

Government bond, FTSE rally fades, sterling slides after Truss's press conference

Despite the climbdown on corporation tax, which the markets were expecting, Liz Truss failed to give the reassurances the public and investors were looking for.

The FTSE 100 index has now pared gains and is only 42 points ahead at 6,891, a 0.6% gain. The pound has dropped 1.2% to $1.1191.

Government bonds were rallying before the press conference, pushing yields sharply lower, but the yield on the 30-year gilt has since ticked up 5 basis points to 4.6%.

The rise in corporation tax from 19p to 25p next April, originally announced by the then chancellor Rishi Sunak in March, and which Truss said during the leadership contest would not go ahead … will now go ahead.

For more market reaction to the PM’s latest U-turn announcement, please follow my colleague Julia Kollewe’s business live blog.

Updated

Here’s the prime minister, Liz Truss, announcing in this afternoon’s press conference that she will raise corporation tax in the government’s mini-budget, marking yet another humiliating U-turn.

Truss said it was clear that parts of her government’s mini-budget “went further and faster than markets were expecting”.

Tory MPs have been texting the Guardian’s Pippa Crerar to say they think that Liz Truss’s press conference has made things worse.

Sam Coates from Sky News has shared a screenshot reportedly showing WhatsApp messages between Tory MPs.

The screenshot apparently shows the former culture secretary Nadine Dorries telling Crispin Blunt he needs “a lie down” if he thinks the party can impose a new leader without a general election.

Blunt allegedly calls for Rishi Sunak and Penny Mordaunt to take over as leader, a move Dorries describes as “the most undemocratic proposal imaginable.”

Updated

The new chancellor, Jeremy Hunt, was spotted arriving at his house in Pimlico in London just an hour after his appointment was announced.

Asked what he hoped to achieve as chancellor, he said:

We’ll have lots of chances to talk later.

Hunt did not reply when journalists asked him if he thinks Liz Truss “has any credibility”.

William James from Reuters news agency reports that Hunt briefly shut his wife out of the house as he tried to get away from the cameras.

Jeremy Hunt arriving at his home
Jeremy Hunt arriving at his home Photograph: Aaron Chown/PA

Updated

Truss's press conference following mini-budget U-turn and sacking of chancellor - snap verdict

Was that it? By the time Liz Truss stood up to start her press conference (although a briefing where only four questions were allowed barely counts), we already knew that she was about to abandon the key thrust of her mini-budget, and that her chancellor had been sacked. The big question was whether Truss would be able to survive herself. Her performance will have done little or nothing to persuade her MPs, or anyone else, that she will, or even that she should.

Truss said that the corporation tax rise planned by Rishi Sunak, that she campaigned to abandon during the Tory leadership campaign, would go ahead anyway. She said this was in response to the fact that her mini-budget “went further and faster than markets were expecting”. (Until today she has implied that global factors, not the mini-budget, were mainly to blame for the recent market turmoil.) But then she tried to explain that she was being consistent with the mission she set out during the leadership contest (boosting growth), even though it is obvious that her strategy has gone up in flames. And – crucially – she failed to explain why, if the chancellor had to go, she should not quit too.

In so far as she did have an answer to this, it was that she is “absolutely determined to see through what I have promised, to deliver a higher growth, more prosperous United Kingdom, to see us through the storm we face”.

Her problem was not just that this line does not explain why she should stay on in No 10 when they are plenty of other people who share her commitment to growth who have a lot more credibility as leaders likely to deliver it. Her whole manner during the press conference advertised a lack of confidence and authority.

She started with a personal plea about how she knew what it was like growing up “somewhere that isn’t feeling the benefits of growth”. This was a reference to the time she spent in Paisley as a child, but she had a middle class upbringing and spent her teenage years living in one of the nicest parts of Leeds. This implied sob story sounded phoney.

Then she only took four questions. Normally politicians who feel the need to persuade the press, or the public at large, are well advised to keep taking questions at a press conference like this until they run out. Not only did Truss fail to do that, she also deliberately started with questions from the two papers most likely to be favourable, the Daily Telegraph and the Sun. Only then did she take questions from the BBC and ITV, who normally get priority at the events.

If Truss was hoping for soft questions first, it didn’t work. But the hardest question was probably the final one, from ITV’s Robert Peston. He asked if she would apologise to her party. She wouldn’t.

The lack of contrition matters because, if Truss is going to survive, she is going to need to secure the goodwill of Tory MPs. With this sort of responsibility-dodging and blame avoidance, she won’t get it.

Updated

Meanwhile, the former Conservative minister Michael Gove appears to be enjoying himself away from the turmoil of Westminster politics.

He says he has spent the day in his constituency speaking to local headteachers about “providing strong leadership”.

He says he also spent the morning discussing “trip hazards” and said, hopefully, that “all should be fixed by mid November”.

Updated

We have some market reaction to Liz Truss’s press conference where she announced that the government will scrap the planned rise in corporation tax.

This is from Sky News’ Ed Conway:

BBC Newsnight’s Nicholas Watt, who earlier reported that a group of senior Tories are planning next week to call on Liz Truss to resign as prime minister, quotes a former cabinet minister as saying that Truss shouldn’t continue as PM.

The Labour leader, Keir Starmer, says sacking Kwasi Kwarteng “doesn’t undo the damage made in Downing Street”.

Starmer says:

Liz Truss’ reckless approach has crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage. We need a change in government.

Labour’s shadow work and pensions secretary, Jonathan Ashworth, says what is clear is that we have a government “in meltdown”.

He tells the BBC:

Liz Truss has sacked her chancellor for carrying out the policies of Liz Truss, a set of policies that led to turmoil on the markets, which led to a run on pension funds and soaring mortgage rates for homeowners across the country.

Updated

Scotland’s first minister, Nicola Sturgeon, has also called for a general election and for Liz Truss to resign as prime minister, arguing it would be the best thing to do for economic stability.

Truss’s decisions have “crashed the economy and heaped misery on people already struggling with a cost of living crisis”, Sturgeon wrote on Twitter.

Liz Truss only took four questions from the media during her very short press conference.

Sky News’ Beth Rigby says journalists are shocked, with one MP having told her that “even by her standards that was really bad”.

Truss declines to apologise to Conservative party for what has happened

Truss is asked if she will apologise to her own Conservative party after being accused by the former Tory chancellor, Philip Hammond, of totally trashing the party’s election-winning reputation for economic competence.

She dodges the question, repeating that she is determined to deliver on what she set out and that she made the right decisions “in the national interest” today.

UPDATE: In response to the question, from ITV’s Robert Peston, Truss said:

I am determined to deliver on what I set out when I campaigned to be party leader.

We need to have a high growth economy but we have to recognise that we are facing very difficult issues as a country.

And it was right in the national interest that I made the decisions I’ve made today to restore that economic stability so we can deliver, first of all helping people through this winter next winter, with their energy bills, but also making sure that our country is on the long term footing for sustainable economic growth.

Updated

Asked what credibility she still has to continue as leader, Truss replies that her actions today have “made sure that we have economic stability in this country”.

As the new chancellor, Jeremy Hunt is somebody who shares her desire for a high-growth, low-tax economy, she says.

But we recognise because of current market issues, we have to deliver the mission in a different way. That’s why we are absolutely committed to do achieving that stability or what is a very difficult time globally.

Liz Truss says she is ‘absolutely determined’ to see through her plans

Asked why she believes she should remain as PM, Truss says she is “absolutely determined” to see through what she promised when she became leader.

She says her priority is to deliver the economic stability the country needs.

That’s why I had to take the difficult decisions I’ve taken today. The mission remains the same. We do need to raise our country’s economic growth levels. We do need to deliver for people across the country. We’re committed to delivering on the energy price guarantee which people are already seeing in their bills. But ultimately, we also need to make sure that we have economic stability, and I have to act in the national interest.

Updated

Truss admits the situation is “difficult”:

I want to be honest, this is difficult. But we will get through this storm and we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.

Truss ‘incredibly sorry’ to lose Kwasi Kwarteng

Truss says she was “incredibly sorry” to lose Kwasi Kwarteng as chancellor, describing him as a “great friend” who “shares my vision to set this country on the path to growth’.

She confirms that she has asked Jeremy Hunt to replace him as the new chancellor of the exchequer.

Hunt is “one of the most experienced and widely respected government ministers and parliamentarians”, she says.

He shares my convictions and ambitions for our country. He will deliver the medium-term fiscal plan at the end of this month. He will see through the support we are providing to help families and businesses, including our energy price guarantee.

Updated

Truss opened her press conference by saying she has been “ambitious for growth” and that her convicted was rooted in her personal experiences.

She says she knows what it’s like “to grow up somewhere that isn’t feeling the benefits of growth”.

I saw what that meant. And I’m not prepared to accept that for our country. I want a country where people can get good jobs, new businesses can set up and families can afford an even better life.

She insists that she will “always act in the national interest”, adding:

We will get through this storm.

Updated

Liz Truss to raise corporation tax in U-turn

The prime minister, Liz Truss, is now speaking at the press conference in Downing Street.

Truss has bowed to intense pressure from Conservative MPs and the markets by scrapping her signature corporation tax cut from the government’s mini-budget.

She says it is clear that parts of her government’s mini-budget “went further and faster than markets were expected”. She says:

So the way we are delivering our mission right now has to change. We need to act now to reassure the markets of our fiscal discipline.

I have therefore decided to keep the increase in corporation tax that was planned by the previous government.

Updated

Liz Truss to hold press conference

The prime minister, Liz Truss, is expected to speak at a press conference from the Downing Street briefing room in the next few minutes.

Updated

The Labour MP, Richard Burgon, says sacking Kwasi Kwarteng as chancellor is not enough and called for a general election.

Liberal Democrat leader Sir Ed Davey has also called for a general election in response to the news that Kwarteng has been sacked as chancellor.

Earlier we pointed out that the bottom of Liz Truss’s letter to Kwasi Kwarteng appeared to have been addressed by Kwarteng.

It appears this is standard practice in the civil service and has been the case for decades.

One of the largest teaching unions is to carry out its threat to hold a strike ballot, after the government in England ignored its demand for a 12% pay rise this year.

The NASUWT union announced that a ballot for industrial action will be sent to members, with voting opening on 27 October and closing on 9 January. The ballot will be sent to members in Wales and Scotland as well as England.

Teachers in England have been offered only a 5% pay increase, with schools minister Jonathan Gullis saying this month that the government “won’t budge”.

Patrick Roach, the union’s general secretary, said:

The NASUWT has done everything possible to seek a resolution to this dispute and to avoid escalation of industrial action in schools and colleges.

The 5% pay award for teachers and headteachers is unacceptable at a time when inflation is running at more than 10% and it will result in even more financial misery for hard working teachers.

Ministers will be entirely responsible for industrial action unless they act immediately to deliver a better pay deal for teachers.

The National Education Union, the other major teaching union, has also announced that a preliminary ballot of members found 86% would support a vote on strike action for an above-inflation pay rise. The preliminary vote saw a 62% turn-out among members.

Edward Argar replaces Chris Philp as new Chief Secretary to the Treasury

Downing Street has confirmed reports that Chris Philp is out as chief secretary to the Treasury, and has been replaced by Ed Argar.

Chris Philp has been appointed Paymaster General, Downing Street said.

Updated

Ryan Bourne, the former head of public affairs at the rightwing Institute for Economic Affairs, has called on Liz Truss to resign as prime minister.

Bourne, who was a supporter of Truss, says there is “no point being in position but not in power”.

Downing Street confirms Jeremy Hunt is the new chancellor

No 10 has confirmed that Jeremy Hunt has been appointed Britain’s new Chancellor of the Exchequer.

The former foreign secretary and Tory leadership contender will be the fourth chancellor this year.

Updated

Truss letter to Kwarteng in full

Here’s the letter from Liz Truss to her former chancellor Kwasi Kwarteng in full:

The bottom of the letter suggests that the letter to Kwarteng was written by Kwarteng himself:

The letter from prime minister Liz Truss accepting the resignation of chancellor Kwasi Kwarteng shows Kwarteng’s name rather than that of Truss under the signature.
The letter from prime minister Liz Truss accepting the resignation of chancellor Kwasi Kwarteng shows Kwarteng’s name rather than that of Truss under the signature. Photograph: 10 Downing Street

Updated

Liz Truss has responded to Kwasi Kwarteng’s letter confirming that he was sacked by the prime minister.

Truss said she “deeply respects” the decision he has taken to “put the national interest first” and stand down.

Truss said:

As a long-standing friend and colleague, I am deeply sorry to lose you from the Government.

We share the same vision for our country and the same firm conviction to go for growth.

You have been Chancellor in extraordinarily challenging times in the face of severe global headwinds.

The Energy Price Guarantee and the Energy Bill Relief scheme, which made up the largest part of the mini budget, will stand as one of the most significant fiscal interventions in modern times.

Thanks to your intervention, families will be able to heat their homes this winter and thousands of jobs and livelihoods will be saved.

You have cut taxes for working people by legislating this week to scrap the increase in National Insurance Contributions.

You have set in train an ambitious set of supply side reforms that this Government will proudly take forward. These include new investment zones to unleash the potential of parts of our country that have been held back for too long and the removal of EU regulations to help British businesses succeed in the global economy.

I deeply respect the decision you have taken today. You have put the national interest first.

I know that you will continue to support the mission that we share to deliver a low tax, high wage, high growth economy that can transform the prosperity of our country for generations to come.

Thank you for your service to this country and your huge friendship and support. I have no doubt you will continue to make a major contribution to public life in the years ahead.

Updated

Labour’s shadow chancellor, Rachel Reeves, has responded to Liz Truss’s decision to fire Kwasi Kwarteng as chancellor after his disastrous mini-budget.

She said:

Changing the chancellor doesn’t undo the damage that’s already been done.

It was a crisis made in Downing Street. Liz Truss and the Conservatives crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage.

We don’t just need a change in chancellor, we need a change in government. Only Labour offers the leadership and ideas Britain needs to secure the economy and get out of this mess.

Jeremy Hunt appointed new chancellor

No 10 has confirmed that Jeremy Hunt will replace Kwasi Kwarteng as chancellor, the Guardian’s Pippa Crerar writes.

She has also confirmed that Chris Philp is out as chief secretary to the Treasury.

Updated

The Times’ Steven Swinford is also reporting that Chris Philp is out as the chief secretary to the Treasury.

Philp has been replaced by Ed Argar, Swinford says.

Jeremy Hunt is the new chancellor, the Times’ Steven Swinford is reporting.

Hunt’s appointment will be announced at this afternoon’s press conference, he said.

No 10 has confirmed that the prime minister’s conference will be held at 2.30pm in the Downing Street briefing room.

Updated

Amid reports that senior Tories are preparing to call on Liz Truss to resign as prime minister within days, many in the Conservative party will say she is as much to blame for the turmoil as Kwasi Kwarteng.

The Guardian’s John Harris says Truss surely can’t be far behind her former chancellor.

Isabel Oakeshott from Talk TV is also struggling to see how Truss can survive this after “infuriating literally everyone, and making the entire nation poorer”.

ITV News’ Paul Brand points out that Liz Truss cannot lay the blame for the mini-budget chaos entirely on Kwasi Kwarteng, as she was repeatedly warned about the risk of her economic policies during the leadership campaign.

Updated

Adam Payne from PoliticsHome says Chris Philp, the chief secretary to the Treasury, may also be on his way out.

He quotes a Whitehall source as saying that Liz Truss is “trying to put clear blue water between the shit show and her”.

Updated

Kwasi Kwarteng confirms he was sacked

Kwasi Kwarteng has confirmed he was asked “to stand aside” as chancellor.

In a letter to the prime minister, Kwarteng writes:

You have asked me to stand aside as your Chancellor. I have accepted.

When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.

As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.

Kwarteng continues:

The economic environment has changed rapidly since we set out the growth plan on 23 September. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I commend my officials for their dedication.

It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The medium-term fiscal plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.

We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first chancellor.

Your success is this country’s success and I wish you well.

Updated

Here’s the moment BBC News announced the sacking of Kwasi Kwarteng as chancellor.

Kwasi Kwarteng sacked after six weeks as chancellor

Kwasi Kwarteng has been sacked after his disastrous mini-budget caused market turmoil, a bailout of pension funds and rising mortgage rates, Downing Street has confirmed.

Kwarteng is leaving the position after just six weeks in the job, despite Liz Truss, the prime minister, having also signed off an array of unfunded tax cuts in the mini-budget last month.

He had returned early from the International Monetary Fund meeting in the US to discuss further U-turns in the budget, after a move to drop the 45p tax rate failed to calm the economic situation.

Updated

Nicholas Watt from BBC Newsnight has been told that a group of senior Tories will call on Liz Truss to resign as prime minister next week.

Updated

Kwasi Kwarteng sacked as chancellor – Sky News

Kwasi Kwarteng has been sacked as chancellor, two sources have told Sky News.

Lib Dems call for general election

The leader of the Lib Dems, Ed Davey, has called for a general election amid the turmoil.

Updated

Liz Truss expected to sack Kwasi Kwarteng ahead of corporation tax U-turn

Kwasi Kwarteng will be sacked as chancellor as Liz Truss tries to restore her political authority ahead of a U-turn on parts of her disastrous mini-budget later on Friday, according to sources.

A Downing Street source confirmed to the Guardian the prime minister intended to get Kwarteng to “carry the can” over her climbdown as she sought to calm the markets and the nerves of jittery Tory MPs.

Truss is meeting Kwarteng, previously her closest political ally and co-architect of her plan for growth, for crisis talks in Downing Street after he dashed back overnight from an International Monetary Fund (IMF) meeting in Washington.

Whitehall insiders told the Guardian the pair held different views on how far the government should go in reversing key elements of its plan to steady the markets and placate anxious Conservative MPs.

Read the full story here:

The Guardian’s Pippa Crerar is also hearing that Kwasi Kwarteng is to be sacked as chancellor.

Labour says 'humiliating' U-turn is necessary

The shadow chancellor, Rachel Reeves, has responded to speculation of the mini-budget U-turn.

Updated

If Kwasi Kwarteng does leave office today, it would make him the second shortest-serving chancellor in modern British history.

The Guardian’s Henry Dyer has the list:

TalkTV’s Tom Newton Dunn reports that Jeremy Hunt is being tipped to replace Kwasi Kwarteng as chancellor.

A No 10 source has said they are not commenting on reports Kwasi Kwarteng is due to be sacked as chancellor, the BBC’s Chris Mason has said.

Asked if the chancellor was being removed, the source told Mason: “I have not heard that information”.

Treasury sources have told the Guardian that Nadhim Zahawi or Sajid Javid could replace Kwarteng as chancellor, if he is being sacked as reported by the Times’ Steven Swinford.

From our political editor Pippa Crerar:

Updated

Here are some pictures of the chancellor – or former chancellor – Kwasi Kwarteng leaving London’s Heathrow airport.

Kwasi Kwarteng leaving Heathrow airport.
Kwasi Kwarteng leaving Heathrow airport. Photograph: Andrew Matthews/PA
Kwarteng leaving Heathrow airport
Kwarteng travelled on a flight from the US ahead of schedule for urgent talks with the prime minister, Liz Truss. Photograph: Andrew Matthews/PA

Updated

Kwasi Kwarteng 'being sacked as chancellor' – report

Kwasi Kwarteng is being sacked as the chancellor, the Times’ Steven Swinford has been told.

Updated

Liz Truss is expected to announce at her press conference at 2pm that corporation tax will rise to 25% from 19% this spring, the Telegraph is reporting.

Sources told the Guardian yesterday that a potential climbdown could involve putting it up by just one or two percentage points, rather than the former chancellor Rishi Sunak’s full 6%.

Updated

The chancellor, Kwasi Kwarteng, will not be standing next to the prime minister, Liz Truss, when she gives her press conference this afternoon, Sky News is reporting.

Sources have said “it looks as if the deal has been done”.

PM to hold press conference this afternoon

Downing Street has just announced that Liz Truss will hold a press conference later today.

The prime minister and chancellor are expected to confirm today that they will U-turn on the plan to freeze corporation tax, the Guardian’s Pippa Crerar writes.

Updated

Liz Truss plans to reverse parts of her mini-budget later today, according to reports.

An announcement is expected today on the reversal of some of the government’s fiscal plans, news outlets are quoting a person familiar with the matter.

Updated

Jane Merrick, from the i, points out that the flight that Kwasi Kwarteng was on performed several U-turns before landing at Heathrow, perhaps in a sign of things to come.

Updated

The flight on which Kwasi Kwarteng was travelling from Washington has now landed at Heathrow airport.

The Guardian’s Jim Waterson has the video.

Kwarteng is expected to head straight to Westminster for crisis talks on his mini-budget.

Updated

That Ipsos poll we discussed earlier also shows Liz Truss has the lowest level of satisfaction with the public ever recorded for a UK prime minister.

The poll shows 16% of adults are satisfied with Truss as prime minister, down 11 points on last month. Her net satisfaction score of -51 is worse than the lowest scores for Boris Johnson (-46), Theresa May (-44), David Cameron (-38) and Tony Blair (-44).

Updated

Beleaguered chancellor Kwasi Kwarteng’s sudden return to London recalls the troubles faced by the then prime minister, James Callaghan, in January 1979. Conservative MP Simon Hoare this morning wrote on Twitter: “‘Crisis? What crisis’ springs to mind”.

Back in 1979, Guardian reporters Ian Aitken and Michael White covered the PM’s return from his summit in the Caribbean. Weighed down by huge global problems, Callaghan told reporters at Heathrow: “I don’t think other people in the world would share the view that there is mounting chaos.”

That quote, White later said, was ignored by the Sun: “The tabloid, then in the early stages of its predatory career as political assassin, famously translated that as: “Crisis, what crisis?” – a quote that would haunt him for the rest of his life.

Updated

Kwasi Kwarteng has hit a record low of nearly 50 years for chancellors after his mini-budget mayhem, according to a new poll.

The Ipsos survey for the Evening Standard showed 65% of respondents are dissatisfied with him, and just 12% said they are satisfied.

The figures give Kwarteng a net rating of -53 just over a month into the job.

Truss 'cancels constituency meetings to stay in No 10'

The BBC is reporting that the prime minister, Liz Truss, has cancelled a series of meetings in her constituency to stay in London and concentrate on the crisis surrounding her mini-budget.

Updated

The Conservative peer, Ed Vaizey, said he disagreed with the international trade secretary, Greg Hands, who earlier said Kwasi Kwarteng’s early return is not unusual. “It is quite unusual for this to happen,” he said.

Speaking to Sky News, Vaizey said the chancellor cutting his trip to the US short is “not a good sign”. He said:

I’m afraid the chancellor coming back a day early doesn’t fill one with confidence.

Some changes to the government’s mini-budget appear to be “inevitable” after it caused such a “catastrophic” economic crisis, he added.

He said a U-turn would be “very embarrassing” for Kwarteng and be “very damaging” to his authority, but it is “not inevitable” he will be forced to go. He added:

The fact that people were speculating about the prime minister’s leadership this early in her premiership is not ideal, but I think he’s just got to bite the bullet. He’s got to try to give the markets confidence in the British economy.

If he can do that then perhaps he can say: ‘Well, I had to do some difficult choices, slightly humiliating choices, but the result is stabilisation and I can move forward.’

Updated

The chancellor Kwasi Kwarteng’s flight is due to land at London’s Heathrow airport in about half an hour, according to the flight tracking site Flightradar24.

Johnny Marr’s drummer, Jack Mitchell, has tweeted that Kwarteng is on their flight.

We can’t verify this tweet but Marr has been performing in Washington this week and has no further US tour dates scheduled.

The former culture secretary, Nadine Dorries, has lashed out at reports that senior Tories are plotting to remove Liz Truss as prime minister.

The Times published a report last night claiming that senior Conservatives are holding talks about replacing Truss with a joint ticket of Rishi Sunak and Penny Mordaunt as part of a “coronation” by MPs.

Party “grandees” are reportedly in discussions about replacing Truss with a “unity candidate”, the paper reported. It quoted one senior Tory as saying that a “coronation won’t be that hard to arrange”.

Dorries described the reported plot as an attempt to “overturn democracy”.

A No 10 source has told the BBC’s Chris Mason that the prime minister wants Kwasi Kwarteng to continue in the job and that she believes he is doing “an excellent job”.

Senior Tory warns Truss economic U-turn must be ‘significant’

A senior Conservative MP has said that Liz Truss must not “nibble at the edges” but instead perform a “powerful” and “significant” U-turn with her government’s so-far disastrous economic plan.

Mel Stride, the chair of parliament’s Treasury select committee, told the BBC’s Today programme:

My personal view is that it [a U-turn] should happen. We have reached a point where we need this very powerful and significant signal to the markets that fiscal credibility is firmly back on the table, and I think that means doing something right now and not delaying.

Doing something very significant too – right at the heart of that will be unwinding the position on corporation tax.

The danger here is the argument in the room lands in a place where they decide to nibble at the edges of this and I’m afraid I don’t think that will cut it, and you could end up in that circumstance in the worst of all worlds where you’ve U-turned but it doesn’t settle the markets in the way we need to.

Updated

The chairman of the Treasury select committee, Mel Stride, has urged the chancellor, Kwasi Kwarteng, to row back on tax cuts announced in the mini-budget and to “do it now”.

Markets have seen some stabilisation on the news of a potential U-turn, Stride told BBC Breakfast. If the U-turn doesn’t happen, then the markets “may have an adverse reaction to that”, he said.

Stride said:

My advice to the chancellor would firmly be: ‘Do it, do it now, make sure it’s something significant, not just nibbling at the edges, but something that’s going to be firm, bold and convincing, and do it as soon as possible.’

He said he hopes Kwarteng is flying home from the US early to have conversations with Liz Truss and row back on tax cuts. Asked if he has any faith in any of the mini-budget, Stride replied:

I’ve argued for a long time that coming forward with multiple tens of millions of pounds worth of unfunded tax cuts in a high inflationary environment with a tight labour market and low growth was never likely to lead to a situation where growth suddenly springs forward and everything slots into place. It was more likely to lead, I’m afraid, to the kind of lack of confidence that’s been in the markets over the last few weeks.

But that’s not to say that we can’t reset and I think there is the time to do that. But I think he needs to bring any announcement he’s going to make about U-turns on taxes, he needs to make them sooner rather than later and certainly not wait till the end of the month when he’ll be bringing forward his general plan and this Office for Budget Responsibility forecast.

Updated

The Telegraph’s Jack Maidment says the mood this morning among Tory MPs is particularly grim.

One MP tells him the situation is a “total mess” and that many other MPs think Liz Truss has to go.

Here’s more from the international trade minister, Greg Hands, who when asked if there will be any more U-turns on the mini-budget, replied: “Let’s wait and see.”

Speaking on Sky News this morning, he said:

Let’s wait and see. You won’t have long to wait for the 31st of October for the chancellor to lay out those plans. I do say that the prime minister and the chancellor are absolutely resolute, determined. The growth plan [is] the centrepiece, but we’ll have to see some of the detail including a full forecast from the Office for Budget Responsibility on the 31st of October.

Here is a summary of Hands’ morning interview round:

  • He suggested the government could make economic announcements ahead of the medium-term fiscal plan on 31 October. He said:

The government will make responses as appropriate as events happen, but the absolute commitment is to publish the medium-term fiscal plan. This is looking at how the government is going to pay for everything, how the government is going to set its budget in the coming years, and that will be laid out in just two weeks’ time.

  • He urged fellow Conservative MPs and the country to “get behind” the chancellor and PM. He said:

Liz Truss is our prime minister, she has my confidence, she should have the confidence of all Conservative MPs, the whole Conservative party and actually deserves the confidence of the country as we go into quite difficult economic times with the rise in energy driven by Vladimir Putin’s invasion of Ukraine, the turmoil in global financial markets.

  • On reports that senior Tories are considering replacing Truss with a joint ticket of Rishi Sunak and Penny Mordaunt, Hands replied:

I don’t recognise that story at all. I was a supporter of Rishi Sunak; somehow I’d be very surprised at that story. I was talking only yesterday with Penny Mordaunt. I don’t recognise that story at all.

  • He sought to distance himself from his previous comments during the Tory leadership contest, where he attacked Truss’s “fairytale” economic policies. He said:

There were a number of different proposals flying around by people, frankly, attached to both camps.

  • When BBC Radio 4 Today programme’s Nick Robinson confronted Hands over his earlier remarks and suggested he was “insulting people’s intelligence”, Hands replied:

Things have moved on a lot. The world has changed a lot from the summer.

Updated

Minister says Kwarteng’s early return is ‘not unusual’

The international trade minister, Greg Hands, has insisted it is “not unusual” for the chancellor, Kwasi Kwarteng, to be returning early from a trip abroad.

Speaking on Sky News, Hands said:

It’s not unusual to come back a day early from an international visit. He’s coming back for discussions with colleagues, we obviously have the medium-term fiscal plan coming up on 31 October, so just in a couple of weeks’ time. There’s work to be done, there’s conversations to be had with colleagues.

But the major meat of the meetings of the IMF and World Bank have finished and the chancellor of the exchequer has been there two days.

He also insisted on ITV’s Good Morning Britain that the prime minister, Liz Truss, and Kwarteng are safe, and sought to emphasise that UK financial markets are not the only ones in turmoil.

Updated

Kwarteng leaves Washington DC early

After a torrid three weeks since his mini-budget sent the economy – and the Tory party – into turmoil, the chancellor, Kwasi Kwarteng, has left a meeting of the IMF in Washington DC early to return home, amid expectations that he and the prime minister, Liz Truss, will be forced into a humiliating U-turn barely a month into their tenure.

As my colleague Larry Elliott reports:

Kwasi Kwarteng has dramatically cut short his visit to the International Monetary Fund, flying home early from Washington in response to the mounting political crisis over his tax-cutting budget.

Adding to signs that the government is preparing to announce a U-turn over its plan to scrap a rise in corporation tax, the chancellor left the US capital a day earlier than planned.

Treasury sources said the chancellor had two constructive days in Washington but was keen to get back to London to engage with colleagues over his medium-term fiscal plan, due to be announced on 31 October.

But his unscheduled departure on a late-night flight from Washington capped a day of drama for the Truss government and prompted comparisons with the sterling crisis suffered by the Labour government in 1976.

Then, the chancellor Denis Healey turned around at Heathrow rather than fly out to an IMF meeting in Manila after pressure mounted on the pound.

Treasury sources refused to comment on whether Kwarteng’s decision meant a U-turn on corporation tax was imminent, but the chancellor was under pressure to make a decision before the financial markets open for business on Monday.

We will have all the latest developments here on the politics live blog.

Here is the agenda for the day.

Morning. Economic crime and corporate transparency bill - second reading.

9.30am. The Office for National Statistics will publish its latest survey of the social impact of the cost of living, goods shortages, and Covid-19.

10.30am. Charity Asylum Aid is bringing a high court challenge to the government’s proposals to send some asylum seekers to Rwanda.

12pm. Weekly UK Covid-19 infection survey, from the Office for National Statistics.

3pm. Cop26 president, Alok Sharma, to speak at the Wilson Centre in Washington.

Updated

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Cher Reveals the "Fiasco" That Ensued When She Performed for Princess Margaret in 1965: "I Was Mortified"
"It was like a bad dream that we couldn’t get out of; we just had to stand there and wait for it to be over."
Marie Claire
Marie Claire
From frozen to feast, how to safely defrost your Thanksgiving turkey
Experts have recommended three different methods to defrost your turkey for Thanksgiving dinner
The Independent UK
The Independent UK
“One of the most important guitars in rock and roll history”: George Harrison’s Futurama smashes auction estimate and sets a new record with staggering $1.27 million sale
The oddball electric – which was used during the Beatles’ early years, and saw action in over 300 historic shows – becomes the most expensive electric guitar formerly owned by a Beatle to sell at auction
Guitar World
Guitar World
Keke Palmer: I'm living life on my own terms
Keke Palmer has revealed that she feels proud to be living life "on [her] own terms".
BANG Premier
BANG Premier
Crypto entrepreneur Justin Sun buys $6 million banana—and plans to eat it unless Elon Musk wants to send it to space
Sun outbid six others for the iconic work.
Fortune
Fortune
Paul Simon names the fan-favorite song he’ll never perform again
The folk rock icon said his hearing loss has limited the songs he can perform live
The Independent UK
The Independent UK
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.
Download on the AppStore Get it on Google Play