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.
Continue reading...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.
Continue reading...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”.
Continue reading...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.
Continue reading...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.’
Continue reading...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.
Continue reading...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.
Continue reading...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”.
Continue reading...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.
Continue reading...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.
Continue reading...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.
Continue reading...PM suggests borrowing will rise as she surprises MPs by saying she has no plans to cut public spending
Liz Truss has said the Conservatives will push ahead with tax cuts without cutting public spending, instead allowing borrowing to rise over the next few years.
Senior economists had warned on Wednesday that such a strategy, if set out by Kwasi Kwarteng in the chancellor’s fiscal plan at the end of this month, would be likely to spook investors, creating renewed market turmoil.
Continue reading...Pensions hedging crisis shows how the City never seems equipped to handle the next big financial hazard
Pension funds have found themselves embroiled in a byzantine world of exotic financial trading that many of them appear to have badly misunderstood.
On Tuesday, a third rescue mission in little more than a fortnight was announced by the Bank of England, which is reprising its role in the 2008 financial crisis as the City’s lifeboat.
Continue reading...Sterling falls more than a cent to below $1.10 after Andrew Bailey tells pension firms they have ‘got to get this done’
The pound has fallen sharply against the dollar after Andrew Bailey warned the Bank of England would not extend its emergency intervention in financial markets beyond this week, after the turmoil sparked by the government’s mini-budget.
Sterling skidded by more than a cent against the dollar to below $1.10 after the Bank’s governor insisted the £65bn scheme to purchase UK government bonds would not be continued beyond the deadline on Friday.
Continue reading...Latest updates: Labour leader hoping to put party on war footing ahead of next election
In the supreme court Dorothy Bain KC, the lord advocate, the Scottish government’s most senior law officer, is now setting out her case.
Here is the 50-page submission to the court setting our her case that was released in July.
Despite the political context of this reference, the questions the court has to decide are limited to technical questions of law. The court will decide them by applying legal principles.
The court will require time after the hearing to prepare its judgement. The hearing is the tip of the iceberg. We also have more than 8000 pages of written material to consider.
Therefore, as usual, is likely to be some months before we get our judgement.
Continue reading...Veteran official gets permanent secretary role instead of reformer as fiscal plan is brought forward by three weeks
Liz Truss has overruled Kwasi Kwarteng’s top appointment at the Treasury and handed the role to a veteran Treasury official, one of a series of moves designed to calm markets and backbenchers.
It was also announced that the chancellor will set out plans to shore up the public finances three weeks earlier than planned and publish long-awaited forecasts by the Office for Budget Responsibility at the same time.
Continue reading...IFS says Kwasi Kwarteng’s mini-budget will leave ministers making serious reductions in public services
Kwasi Kwarteng will need to find £60bn of savings by 2026 to fill the gap left by unfunded tax cuts and the costs of extra borrowing triggered by a panicked reaction on international money markets to the chancellor’s “mini-budget”, according to the Institute for Fiscal Studies.
The UK will also struggle to hit the chancellor’s 2.5% growth target, with economic forecasts by the investment bank Citigroup that the IFS uses to underpin its analysis showing the UK will struggle to grow at more than 0.8% on average over the next five years.
Continue reading...The PM and chancellor will try to stop panic spreading through the party after their high-risk economic plan threatens a ‘death spiral’
The prime minister, Liz Truss, and the chancellor, Kwasi Kwarteng, will face the wrath of Tory MPs at a succession of crisis meetings in parliament this week as their high-risk economic policies hit their poll ratings and spread panic in all wings of the party.
After a turbulent first five weeks at No 10 and an ill-disciplined, chaotic annual conference in Birmingham last week, Truss is expected to address the 1922 Committee of Tory backbenchers on Wednesday evening after taking on Keir Starmer at prime minister’s questions.
Continue reading...Initiative may continue beyond December as bank bosses raise concerns over mortgage market
The chancellor is considering extending the government’s mortgage guarantee scheme after UK bank bosses raised concerns over the state of the UK’s mortgage market at a high-level meeting at No 11 Downing Street.
The meeting on Thursday – which was attended by chief executives including Alison Rose of NatWest, Charlie Nunn of Lloyds Banking Group, HSBC UK’s Ian Stuart, Mike Regnier of Santander and TSB’s Robin Bulloch – was scheduled amid mounting fears about the potential fallout from rapidly rising mortgage rates.
Continue reading...It’s been four weeks since Liz Truss became prime minister and her policies are already facing criticism from senior Conservative MPs. Rafael Behr reports on whether she’ll be able to hold the party together
On Wednesday, Liz Truss addressed her party at the Conservative party conference in Birmingham. She told the party that she was “ready to make the hard choices”, but with some Tory MPs already publicly criticising her policies, are her days as prime minister numbered?
The speech was interrupted by two Greenpeace protesters holding up a banner saying “who voted for this?”, a sentiment shared by the former culture secretary Nadine Dories who tweeted earlier in the week “if Liz wants a whole new mandate, she must take it to the country”.
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