Lloyds bank profits plunge by 26% as lender prepares for bad loans

Larger-than-forecast drop to £1.5bn in third quarter came despite rising interest rates

Profits at Lloyds Banking Group dropped by 26% in the three months to September, as the UK’s “deteriorating” economic outlook forced it to put aside nearly £670m to protect against potential defaults on loans and mortgages.

Lloyds, which owns Halifax and is the country’s largest mortgage lender, said pre-tax profits had tumbled to £1.5bn in the third quarter, down from £2bn during the same period last year. That was larger than the 9.5% fall to £1.8bn that analysts had predicted.

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Cost of living crisis: Stop the Squeeze calls for wealthiest to ‘pay proper share’ of tax

Coalition of 40-plus charities and groups launches amid fears of spending cuts to plug public finances

Pressure is building on the leaders of Britain’s two biggest political parties to support higher taxes on wealth amid growing fears over the impact that a renewed austerity drive would have amid the cost of living crisis.

In an intervention which comes as the new prime minister, Rishi Sunak, considers options for filling a £35bn black hole in the public finances, a new coalition of 40 charities and campaign groups – including Oxfam, Save the Children and Christians Against Poverty – said Britain’s tax system was broken and those who paid the most should “pay their proper share”.

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Bank of England left in the dark ahead of new interest rate decision

With fiscal statement deferred and mixed government messaging on tax and spending the BoE has little to go on

The Bank of England will next week consider how much to raise interest rates without having received any guidance from the government about its tax and spending policies, after Jeremy Hunt pushed back the date for this year’s “autumn statement”.

Its policymakers meet on 3 November to decide the increase in the cost of borrowing required to tackle a rate of inflation that climbed above 10% in September.

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Pensions triple lock and benefits in spotlight as Sunak delays fiscal plan

No 10 not committing to keeping triple lock or inflation-linked benefits rise in 17 November statement

Ministers are to re-examine the pensions triple lock and increasing benefits in line with inflation over the next fortnight, according to No 10, after Rishi Sunak delayed the announcement of the government’s fiscal plans from 31 October to 17 November.

The Treasury has said the new date will now be a full autumn statement, with Sunak telling his cabinet that time needed to be made to do things in the proper way.

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Wealth taxes could raise £37bn for UK public services, campaigners say

Tax Justice UK calls on Rishi Sunak’s government to introduce five reforms targeting the richest people

Rishi Sunak’s new government could raise up to £37bn to help pay for public services and the energy bills support scheme if it introduced a string of “wealth taxes”, according to tax equality campaigners.

Tax Justice UK called on the government to introduce five tax reforms targeting the very wealthy, who the campaign group said had done “really well financially” during the coronavirus crisis and national lockdowns, rather than seek to save money with further cuts to public services.

Equalising capital gains tax with income tax could raise up to £14bn a year. At present many well-paid people collect their salaries via sole trader or business partnership companies, and can pay capital gains tax at a rate of 20% rather than income tax, which is as high as 45% for earnings over £150,000. CGT also applies to income from renting out a second home, and dividend income on stocks and shares.

Applying national insurance to investment income could raise £8.6bn.

Closing loopholes on inheritance tax could raise £1.4bn.

Scrapping the non-dom regime and taxing their offshore income could generate £3.2bn.

And introducing a 1% tax on super-rich people’s assets over £10m could raise an additional £10bn.

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Nearly man to next PM: Rishi Sunak’s rapid change of political fortune

Former chancellor looked finished when he lost to Liz Truss – but out of chaos has come a ‘coronation’

One of the many unlikely knock-on effects of Liz Truss’s ultra-brief time as prime minister is the fact that when her successor walks into No 10, the political obituaries that calmly wrote him off as the nearly man of modern UK politics will be just seven weeks old.

Had Boris Johnson successfully returned it would have been viewed, with reason, as an extraordinary and unprecedented comeback. But in some ways Rishi Sunak’s career resurrection has been just as unlikely.

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Jeremy Hunt to detail mini-budget U-turn to MPs after Penny Mordaunt insists PM had ‘genuine reason’ for missing Commons question – live

Latest updates: chancellor to make statement after leader of Commons denied PM was hiding under a desk

Judging by what Conservative MPs have been telling journalists in private over the last few days, the consensus (but not unanimous) view among Tories seems to be that Liz Truss will have to be replaced as party leader before the next election. But very few MPs are saying that in public, and Sky’s Tom Larkin, who is running a spreadsheet of Tories calling for Truss’s resignation, has only got three names on it.

Damian Green, the former first secretary of state, was on the Today programme and you would expect him to be on the Larkin list. He is chair of the One Nation Conservatives caucus, the group most horrified by Truss’s experiment with hardline free market ideology. But he insisted that Truss did have the credibility to carry on as PM, despite the fact she is abandoning most of the key tax policies at the heart of her leadership campaign. He explained:

She is a pragmatist - she’s realised that the first budget didn’t work in spectacular fashion, so she’s now taken the sensible view that we will now try something else, and she’s appointed a very sensible chancellor in Jeremy Hunt.

I obviously don’t know what he’s going to say, but clearly what he’s going to do is already beginning to reassure the markets, and I hope will continue to do so afterwards.

Yes, because if she leads us into the next election, that will mean that the next two years have been a lot more successful than the past four weeks have been. That would not only be good for the Conservative party, that would be particularly good for the country as well, so I think everyone would welcome that.

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Liz Truss fights for survival as even allies say she could have only days left

Prime minister to meet mutinous Tory MPs this week in effort to shore up her position after U-turns on tax

Liz Truss is fighting for her political survival, with Conservative MPs threatening to oust her and even allies warning she has just days to turn around her premiership despite ripping up her economic strategy and appointing Jeremy Hunt as chancellor.

The beleaguered prime minister will attempt to shore up her crumbling support by gathering her cabinet ministers at No 10 on Monday and then embarking on a series of meetings with mutinous Tory MPs before the next budget in a fortnight’s time.

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The unravelling: the full story of how Liz Truss lost her way – and her authority in the Tory party

The prime minister ditched her close ally Kwasi Kwarteng to save her own job – but now Conservative MPs are openly plotting to replace her

After an astonishing eight-minute press conference, in which Liz Truss attempted to salvage her imploding leadership by firing her closest political ally and ditching a totemic policy that won her the job, the most telling reaction was that of officials who had served in Boris Johnson’s chaotic Downing Street.

Just a few short months ago, they had been forced to endure months of scandal, followed by the resignations of dozens of ministers. They had even awkwardly brushed shoulders with cabinet members gathered in Downing Street to tell Johnson that his time was up. But after watching Truss’s hunted demeanour on Friday afternoon, their suffering suddenly seemed trifling.

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‘Send off the clowns’: Labour ads tear into Tories amid Truss crisis

Scathing posters ridicule Conservatives for damaging Britain’s reputation, lifting mortgages and crashing the economy

The UK’s Labour party is looking to capitalise on the government crisis with a series of new adverts as it gears up for the next general election.

The scathing posters, seen by the PA news agency, attack the Conservatives for damaging Britain’s standing on the world stage, hiking mortgages and crashing the economy.

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Jeremy Hunt says difficult decisions ahead after Truss ‘mistakes’

New chancellor vows to be ‘completely honest with country’ amid rumours PM has only weeks left in role

The new chancellor, Jeremy Hunt, has spoken of “mistakes” made by the Liz Truss administration and predicted “difficult decisions ahead”.

Appearing on Sky News on Saturday, in his first interview since replacing Kwasi Kwarteng on Friday, the former health secretary signalled he would have a “clean slate” when it came to the budget, and vowed to be “completely honest with the country” amid rumours that Truss has only weeks left as prime minister.

Hunt, who was parachuted into No 11 in an attempt to restore order to Truss’s ailing government, also suggested that some taxes could rise, as he promised to bring stability to the UK in the wake of the disastrous mini-budget.

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Keir Starmer criticises ‘grotesque chaos’ under Liz Truss government

Labour leader says UK is ‘crying out for clear leadership’ and his party ‘must provide it’

Keir Starmer has criticised the “grotesque chaos” of recent weeks and said the government “no longer has a mandate from the British people”.

The Labour leader said there were no historical precedents for the ongoing economic turmoil and that the prime minister, Liz Truss, would not be able to “fix the mess she has created”.

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Truss premiership ‘hanging by thread’ after Kwarteng sacking and latest U-turn

PM’s move to replace chancellor and commit to raising corporation tax fails to placate markets or Tory MPs

Liz Truss is desperately clinging to her premiership after she sacked her chancellor and ripped up the mini-budget but failed to calm the financial markets or furious Conservative MPs.

In a humiliating reversal, the prime minister backed down on plans to scrap an £18bn rise in corporation tax and replaced Kwasi Kwarteng as chancellor with Jeremy Hunt.

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

Source close to sacked chancellor briefs Times that ‘wagons are still going to circle’ around embattled prime minsiter

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.

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.’

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Kwasi Kwarteng was logical choice as chancellor but hubris was his downfall

Truss ally has experienced a dramatic reversal of fortune after five weeks and three days in the job

When Kwasi Kwarteng became chancellor on 6 September it seemed a logical career progression. Deemed a politician imbued with economic doctrine, even his critics conceded he was determined and intellectually imposing. Five weeks and three days later, he is gone.

The newly restored backbench MP for Spelthorne in Surrey is not the shortest-serving chancellor of modern times, but only because the holder of that unwelcome title, Iain Macleod, died from a heart attack a month into his tenure in 1970.

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Liz Truss appoints Jeremy Hunt as chancellor after sacking Kwarteng

Former foreign secretary and leadership contender is back in cabinet, in stunning reversal of fortune

Jeremy Hunt has been appointed as Liz Truss’s new chancellor, in a stunning reversal of political fortune and a sign that the beleaguered prime minister wants to reach out to other sections of the Conservative party.

Hunt, the former foreign secretary and health secretary, has twice tried unsuccessfully to become Conservative leader.

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Liz Truss bows to pressure with corporation tax U-turn ‘on the table’

Speculation that reversal on leadership campaign pledge risks split with her chancellor, Kwasi Kwarteng

Liz Truss has bowed to intense pressure from Conservative MPs and the markets by agreeing to redraw her mini-budget, paving the way for a major U-turn on her signature corporation tax cut.

In another serious blow to her authority as prime minister, government sources told the Guardian that a climbdown on the plan to scrap the rise in corporation tax was now “on the table”.

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‘Let’s see’: pressure builds for No 10 U-turn on corporation tax

Reversing key plank of her leadership pitch would be much bigger humiliation for Liz Truss than 45p rate U-turn

The clamour among Conservative MPs for a third U-turn by Liz Truss started the same as the others: one MP begins as an outrider, backed by some party veterans or ex-cabinet ministers, and the question catches alight across broadcasters who ask every MP they see. Soon enough, it is received wisdom.

Most MPs who are squeamish about deposing their third prime minister had hoped that they would see change in the markets and contrition from No 10 and 11 after the U-turn on the 45p rate. Over the course of the past week, it has been clear to them that will not happen.

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UK’s Brexit divorce bill stood at £36.7bn in 2021, EU audit reveals

Settlement was down from £41.7bn, reflecting payments already made to cover UK obligations

The UK’s Brexit “divorce bill” stood at €41.8bn (£36.7bn) in 2021, according to the EU’s official auditors.

The European court of auditors’ annual report revealed that the UK was expected to make €10.9bn in payments to the EU during 2022.

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No 10 warns of ‘difficult decisions’ on public spending despite Truss’s vow to avoid cuts – UK politics live

Statement from No 10 comes straight after PM told MPs she was ‘absolutely’ committed to avoiding public spending cuts

Sajid Javid, the former Tory chancellor, has been speaking at an event organised by the Legatum Institute thinktank this morning. As Chris Smyth from the Times reports, Javid said the turmoil in the markets was caused by the fact that the tax cuts in the mini-budget went “way beyond” what Liz Truss promised during the leadership campaign, and by the fact that her energy bills bailout was also much bigger than expected.

The government has drawn up a plan to cap the unit cost of gas and electricity for two years. Labour proposed its own plan to freeze energy bills, but it only proposed a commitment for six months.

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