for more alive and breaking events from london and around the world. this is bbc news. britain has a new chancellor. jeremy hunt has been named chancellor of the exchequer after kwasi kwarteng was sacked as chancellor of the exchequer following the unfunded tax cuts in his mini budget three weeks ago which was followed by a turmoil on the financial markets and higher mortgage payments for millions. mr kwarteng cut short a trip to the us to return to london this morning. it's thought prime minister liz truss will announce another

u—turn this afternoon, possibly abandoning plans for lower corporation tax. she's due to hold a news conference in about half an hour. kwasi kwarteng has confirmed his being sacked in a letter to the prime minister which begins by saying he had asked him to set aside and that he had accepted amongst the other quotes in a letter saying that the situation he faces is incredibly difficult with raising global interest rates and energy prices and following the status quo was not an option. his letter continues, the economic environment has changed rapidly since we set out the growth plan on the 23rd of september together with the bank of england we have responded to those events and it concludes that it is important now, as we move forward to emphasise the government commitment to fiscal discipline. the medium term financial fiscal plan is crucial to

this end. let's go live to our political correspondent leila nathoo who's at downing street. kwasi kwarteng has gone as chancellor and we are seeing that jeremy hunt will succeed him and we have a statement from the prime minister coming up in a few minutes�* time at which she is expected to announce a u—turn, possibly, on the mini budget of last month? yes. announce a u-turn, possibly, on the mini budget of last month? yes, what a mornin: mini budget of last month? yes, what a morning it — mini budget of last month? yes, what a morning it has _ mini budget of last month? yes, what a morning it has been. _ mini budget of last month? yes, what a morning it has been. we _ mini budget of last month? yes, what a morning it has been. we are - a morning it has been. we are expecting to hearfrom liz a morning it has been. we are expecting to hear from liz truss in a press conference within the hour orso a press conference within the hour or so here at downing street but we know already she has sacked her chancellor, kwasi kwarteng and he made that clear in his letter to her that he was asked to stand aside. her letter back to him reads warmly talking about a deep friendship and a shared mason and interesting that she was pointing still to her commitment to having a low tax

economy when of course she is widely expected to have to row back on those measures in the press conference and all of the speculation is that she will have to ditch key parts of the mini budget. the messages, with the move of chris philp as former chief secretary to the treasury into the cabinet office is that there is a new regime at the treasury and the prime minister has listened to concerns and has been taking soundings from her backbenchers all week and this is clearly trying to send a message of having taken decisive action and then there will be the question of what policy changes she announces this afternoon, but i think this is a tricky line for the prime minister to tread because she is so closely associated with the policies in that mini budget, and she has had to sacrifice her close friend and political ally in kwasi kwarteng to try to hang on to her own position, but i think a lot rests on what she says this afternoon, because her position right now is far from

secure. w , position right now is far from secure. , ., , , secure. exactly. there has been talk, secure. exactly. there has been talk. apparently. _ secure. exactly. there has been talk, apparently, on _ secure. exactly. there has been talk, apparently, on the - secure. exactly. there has been talk, apparently, on the back. talk, apparently, on the back benches from conservative mps about replacing her, if they could, with maybe rishi sunak and penny mordaunt, that there would be a joint ticket to replace liz truss. how much danger do you think she is in, and how much was kwasi kwarteng and bringing injeremy hunt a way of saving her skin? and bringing injeremy hunt a way of saving herskin? i and bringing in jeremy hunt a way of saving her skin?— saving her skin? i think it's worth sa in: saving her skin? i think it's worth saying there _ saving her skin? i think it's worth saying there has _ saving her skin? i think it's worth saying there has been _ saving her skin? i think it's worth saying there has been all - saving her skin? i think it's worth saying there has been all sorts i saving her skin? i think it's worth saying there has been all sorts of conversations taking place among tory mps at various levels of government, various different scenarios playing out in their minds and i have to say none of them looks and i have to say none of them looks a good option. and i don't think the sacking kwasi kwarteng was something that has come as a complete surprise. it was certainly something being talked about this week when you were talking to tory mps entertaining what the prime minister could do next to restore credibility and try to restore credibility not

only with the markets but in her own party as well, so it's not a wholly unexpected move but i do think it leaves in the same position with trying to answer the question, that if kwasi kwarteng had to go and he was the owner of the budget, who was the otherjoint owner? so she finds herself in a position of having to try to distance herself from the policies over which she has ostensibly sacked kwasi kwarteng, and she is going to have to do some work to try to persuade her party, the markets on the public that she is now prepared to change course dramatically and survive that sort of political upheaval, because remember, she campaigned precisely on a low tax platform and just this week at prime minister's questions on wednesday she was fending off questions about whether it was the right thing to do to reverse the rise in corporation tax, saying it would be wrong to raise corporation tax at a time when the country needed an investment, so she has a

huge about to turn to do if she is going to reverse on the tax—cutting measures, but i think it might reassure her party in terms of economic credibility and restore her economic credibility and restore her economic credibility and restore her economic credibility in the eyes of the markets, but it certainly poses a new belittle danger and the question as to what exactly she will stand for if she continues in office. . our business correspondent darshini david, is here. the crisis after the budget was sparked by reaction to the mini budget with the pound falling and the crisis on the bond market as well. what has been the response so far of the markets to what we've heard so far, kwasi kwarteng being sacked, but what might be to come in terms of a u—turn from the prime minister? terms of a u-turn from the prime minister? �* , . ,. ., minister? it's fascinating. the markets have _ minister? it's fascinating. the markets have been _ minister? it's fascinating. the markets have been judge - minister? it's fascinating. the markets have been judge and | minister? it's fascinating. the - markets have been judge and jury as far as the last few weeks are concerned on the uk's economic strategy and i can't believe i am

using the sentence, but we are seeing relatively muted responses in the market to the events of the last couple of hours and the pound went down when we heard about the sacking of kwasi kwarteng but it has gone back up in the last few minutes. really small movements compared to what we saw in the last few weeks and the reason is this, they are not judging the man, they arejudging the policies and that is what is needed for credibility. and when we talk about what we are likely to hear from the prime talk about what we are likely to hearfrom the prime minister in talk about what we are likely to hear from the prime minister in the next half hour or so, even if we see some reversals with corporation tax being talked about and there are a few other bits and pieces, the hints into the letters to the outgoing chancellor, she talks about national insurance and the energy help, those are tens of billions of pounds to the cost of the public purse. how will it be paid for and can she bring debt down? what does it mean for the plan for growth we have heard about. all of those questions we probably won't have answered this afternoon which remains with anxiety in the markets. the afternoon which remains with anxiety in the markets.— in the markets. the fact is the markets had _ in the markets. the fact is the markets had factored - in the markets. the fact is the markets had factored in - in the markets. the fact is the markets had factored in a - in the markets. the fact is the i

markets had factored in a u-turn in the markets. the fact is the - markets had factored in a u-turn on markets had factored in a u—turn on corporation tax, so that is a given. she needs to do quite a lot more to satisfy them. the she needs to do quite a lot more to satisfy them-— she needs to do quite a lot more to satisfy them. the whole thing about the markets — satisfy them. the whole thing about the markets is _ satisfy them. the whole thing about the markets is buy _ satisfy them. the whole thing about the markets is buy on _ satisfy them. the whole thing about the markets is buy on rumour, - satisfy them. the whole thing about the markets is buy on rumour, selll the markets is buy on rumour, sell in fact, and the idea that we would see the u—turn on corporation tax has caused them to act as if that were the case, in the last 2a hours, head of the sacking of kwasi kwarteng, so in a way, if we don't get that, you could me more people. has she backed herself into another corner, and we say another because we heard at prime minister's questions, the prime minister said she could bring down debt in a few years and still not cut public spending and that is something that a lot of economists out they are saying, surely not? if they are saying, surely not? if they are saying that, well the markets are keeping a close eye out. she has put a veteran cabinet minister into the post of running the treasury and it might not be enough to soothe their nerves. they want to see the hard numbers and to see how it all plays out and in the meantime, we pay the

cost through higher borrowing. fascinating to see what the prime minister will say. at the moment, good to see you and thank you for that analysis. we can talk to doctor kathryn howden. we are on to our fourth chancellor this year, and liz truss's prime minister, that is not a given now, is it? ida; truss's prime minister, that is not a given now, is it?— truss's prime minister, that is not a given now, is it? no, it's not. we knew that — a given now, is it? no, it's not. we knew that even _ a given now, is it? no, it's not. we knew that even before _ a given now, is it? no, it's not. we knew that even before the - a given now, is it? no, it's not. we knew that even before the events | a given now, is it? no, it's not. we| knew that even before the events of today that there's been a lot of speculation in her party, but that is only almost the usual course for the government as we spent the year with a huge amount of speculation and what is interesting at the moment is the questions for the short term governing that her government needs to do. she has appointed a veteran cabinet minister, a very experienced man in the health brief of dealing with public services with large budgets but has not worked in the treasury and at the same time she is about to

go out and give this statement and we do not know what it will include but a lot of speculation about economic policy and from the new chancellor's point of view he has this medium—term fiscal statement as it is being called, another of the strange phrases which means almost another mini budget, in two weeks' time, two weeks on monday and also the statement from the office for budget responsibility with a forecast, so that is a tall order to suddenly take over in the middle of already a financial crisis, not knowing how the markets will react and we often at the institute talk about the problems of reshuffles and the churn of ministers. we don't have quite this level of churn. we are normally talking about moving them on after 18 months or two years, but it will be a very tall orderforjeremy hunt to years, but it will be a very tall order forjeremy hunt to get to grips with that and a big task for the treasury because they have had a huge amount of upheaval with losing

a permanent secretary, to get a permanent secretary and then get a new chancellor and lose another. it's a big challenge for them to make sure that there is stable economic policy and that is what people will be looking for. d0 economic policy and that is what people will be looking for. do you aet people will be looking for. do you net the people will be looking for. do you get the impression _ people will be looking for. do you get the impression that _ people will be looking for. do you get the impression that she - people will be looking for. do you get the impression that she will l people will be looking for. do you | get the impression that she will do u—turns on the mini budget, but also politically, she has almost changed her political direction and is trying to sort of reach out to other parts of the conservative party that would say they have been alienated ijy would say they have been alienated by her and she is trying to bring them into her tent by bringing in jeremy hunt as chancellor. yes. for an prime jeremy hunt as chancellor. yes. for any prime minister, _ jeremy hunt as chancellor. yes. for any prime minister, managing - jeremy hunt as chancellor. yes. for any prime minister, managing the l any prime minister, managing the back benches and parliamentary relationships is crucially important but in recent years a lot of that's almost been forgotten and got confused as we had theresa may with a minority government almost not reason —— realising that governing is a minority is difficult and we

got so used to it that we forgot that when you are governing as a majority you are still making compromises with your party and you add to the fact that the conservative party has got increasingly fractured on different issues. it's not a binary bit of support for one person or another, and that makes it difficult for any prime minister and there are tried and tested things you have to do, but the problem is, once you start to go down the slippery slope of alienating or annoying backbenchers, especially when you have increasingly experienced former ministers who are going to the back benches with axes to grind because they lost out on a job or did not get a job in her new government, thisjust makes it get a job in her new government, this just makes it harder and get a job in her new government, thisjust makes it harder and harder and my colleague has set out a blog where she talked about the various challenges that liz truss faces on the parliamentary front and we are already seeing one of them come to a

head, so she still has plenty more to come and it's going to take a great deal of sophistication in terms of that parliamentary party handling in order to navigate that, and that really does start today with how these changes are seen and also what she says in this press conference shortly.— also what she says in this press conference shortly. briefly, as we are auoin conference shortly. briefly, as we are going to _ conference shortly. briefly, as we are going to have _ conference shortly. briefly, as we are going to have this _ conference shortly. briefly, as we are going to have this news - are going to have this news conference in a few minutes' time from the prime minister. what does she need to do, in essence to maintain the stability of her government, but also her own position as prime minister? it’s position as prime minister? it's reall position as prime minister? it�*s really difficult when you see a u—turn. it's almost the worse it gets, the bigger the u—turn you have to make and there are different elements of that. it is one thing to reverse the policy you have done, but if in sticking with the policy for so long you've created more damage you have to do more and go further in order to reverse course on the damage done and obviously

this is a big move, changing the personnel, it sends out a strong signal that there is the sleeping strategic thinking going on about what kind of u—turn we need to do. if decided we want to fix it, what we do to get there? but the big question is notjust what she does in policy terms, but what is the tone of that. is there going to be a point that she accepts that some of this was got wrong, or will it be a continuation of talking about the wider international financial situation she found herself in, or talking about failures on the communications around the policy in the way it was rolled out. a lot of her party will be looking at the tone of it and also the undercurrent is coming with it. does she claim any kind of responsibility for herself? so, yes, it's a really interesting case study almost in u—turns and where that she is able to achieve what she wants. taste

u-turns and where that she is able to achieve what she wants.- to achieve what she wants. we are out of time. _ to achieve what she wants. we are out of time, but _ to achieve what she wants. we are out of time, but thank _ to achieve what she wants. we are out of time, but thank you - to achieve what she wants. we are out of time, but thank you for - to achieve what she wants. we are l out of time, but thank you for being with us. you are watching special bbc coverage of the political crisis in downing street. kwasi kwarteng has been asked to step aside as chancellor after being recalled early from a meeting of globalfinance ministers in global finance ministers in washington. there was a controversial mini budget last month which prompted turmoil on the financial markets. these are the latest pictures of kwasi kwarteng departing from downing street and the developments, day after downing street insisted

its position on the tax—cutting programme remained unchanged. but opposition to the measures from within the conservative party itself has continued, and indeed has grown. 10 downing street has tweeted in the last few minutes and says 10 downing street has tweeted in the last few minutes and sasteremy hunt has been appointed chancellor of the exchequer and also says that edward argar has been treasury minister and chris philp is paymaster general and minister for the cabinet office i moved out of the cabinet office i moved out of the treasury. let's go live to our deputy political editor. what does this say about liz truss and her fight for survival as prime minister, that she has brought in jeremy hunt as her chancellor? yesterday there was speculation about what she was going to do next, given the huge amount of pressure she was under and lots of tory mps

saying, would she throw one of her closest political allies under the bus and attempt to protect herself. it appears that is exactly what has happened but i think there will be conservative mps wondering if that will be enough. it is not the idea that there is a chancellor who went out on a limb and did something she did not agree with. idea logically, they are completely at one on all of this, this high growth, low tax, the mini budget again, allsigned this, this high growth, low tax, the mini budget again, all signed off, and a joint effort, so i think there was lots of conservative mps and what they want to know now is not about the change of personnel. jeremy hunt, what has he said he wants to happen if he is taking over that crucial position of being chancellor? will the programme change? we certainly think there will be more u—turns to come and we will be more u—turns to come and we will find out more about those in the next few minutes on the one everyone is talking about is corporation tax which brings in a huge amount of money for the

government. liz truss did not want that to go on in the way that rishi sunak had said it should. she wanted to keep it where it is and we think now that that will probably change, and that is in order to make the numbers add up. that is why the markets have been so jittery and they looked at the huge amount of borrowing that the government was proposing in order to fund tax cuts and they did not like what they saw, so the real question now is how far she is going to change that programme, and if she does, where does it leave the whole reason of being in government. and it looks like she willjunk a load of policies. like she will “unk a load of olicies. like she will 'unk a load of policies.— like she will “unk a load of olicies. , ., , ., policies. the question is how many olicies policies. the question is how many policies she _ policies. the question is how many policies she does _ policies. the question is how many policies she doesjunk. _ policies. the question is how many policies she doesjunk. we - policies. the question is how many policies she doesjunk. we heard l policies she doesjunk. we heard that the financial markets are already factoring that in as a given, that that will be reversed

but the question and the crash will be what she has to do to satisfy the markets but that is at the centre of the crisis. but the national insurance cup went up in april. it is now going to go back to where it was in november, and that has been voted through the house of commons. there wasn't much chat about it because labour were supporting that, so that one has already happened on the other one is income tax and a penny off income tax is due to come in in april but rishi sunak said that should come in but not for another year, and the question is, will she go along with that and maybe delay it a little bit. could there be other proposals. the biggest thing at the centre of the mini budget was to help for energy bills which was a huge amount of money, and we presume that will stay in place, so it doesn't leave her with a lot of room for manoeuvre. other people making the point that what they are doing are things like the rates at which you pay tax,

moving to tax and go to higher bands, that is staying where it is. it is being frozen, and what it means is more and more people as their wages go up and get dragged into paying tax in the first place and dragged into paying even more tax, so that brings in quite a lot of revenue to help fill some of that. will people be looking to see the numbers, and this goes back to the numbers, and this goes back to the original problem. they brought forward this mini budget which was anything but and had a huge, sweeping announcements, but they did not have that independent assessment of how the numbers added up and they decided they would do that later, and the markets did not like tory mps hated it, and that is why we are where we are now. just mps hated it, and that is why we are where we are now.— where we are now. just to put it into context, _ where we are now. just to put it into context, she's _ where we are now. just to put it into context, she's only - where we are now. just to put it into context, she's only been i where we are now. just to put it - into context, she's only been prime ministerfor a few weeks. into context, she's only been prime minister for a few weeks. if she had said she would persist with her policies, even if they made her very unpopular, she would fight through any unpopularity, but here we are, on the brink of what appears to be the announcement of a pretty massive

u—turn. in the announcement of a pretty massive u-turn. ,., ._ , the announcement of a pretty massive u-turn. , i. u-turn. in some ways, you can fight unpopularity — u-turn. in some ways, you can fight unpopularity if _ u-turn. in some ways, you can fight unpopularity if you _ u-turn. in some ways, you can fight unpopularity if you have _ u-turn. in some ways, you can fight unpopularity if you have several - unpopularity if you have several years until a general election. she has only got two. the immediate problem she had was the reaction of the markets. she and kwasi kwarteng as free marketeers wanting the markets to do what they have to do, but unfortunately he has been brought down by the reaction to it all, so it's ok to say you are willing to be unpopular but also very unpopular amongst her own mps. i've never seen the conservative party, even through the torrid days and last months of borisjohnson, i've never seen them so despondent because the difference this time is the opinion polls which are suggesting to lots of tory mps, and they certainly think so, that dozens of them will lose their seats, and that changes the whole political dynamic, because they are looking at this and thinking we are going to lose our seats and we have to do something to sort it out and one former cabinet minister said it would not get any better and she is not up to the job, so even if she

changes tack, they will say, what is the point? why have we got her if she is just changing what she was voted in to do? i don't think the trouble is overfor voted in to do? i don't think the trouble is over for her at this point, but even given the incredibly recent volatile times in politics, seeing a prime minister and a chancellor imploding in this way so quickly is pretty unprecedented. for the moment, thank you, but stay there. i know you will stay there anyway but we want to talk to you in anyway but we want to talk to you in a minute and we are still waiting for that crucial news conference from the prime minister at 10 downing street and a few minutes' time. but while we wait for that, let's talk to our economics correspondent. let's talk about market reaction to what all of the developments we have already had, which is the sacking of the chancellor, but what else are they looking for in terms of stabilisation from the prime ministerial statement we will get. what do they want to see in terms of u—turns on the mini budget? this

u-turns on the mini budget? as ou've u—turns on the mini budget? is you've already u—turns on the mini budget? sis you've already said, there's been a certain amount of reaction in the last 36 hours. markets had got wind of the idea that we could see a u—turn, especially with corporation tax, and as we have been saying, they arejudging tax, and as we have been saying, they are judging not the man at the dispatch box. they don't mind who was chancellor. what they mind about is what the policies are. so is it just that? could there be more? because this is less than half of the £43 because this is less than half of the £a3 billion of tax cuts on the table which are as yet underfunded. what else could go? there are other measures, like the rules around self employment and how you pay tax and tax free shopping and we heard vicky talking about the basic rate of income tax. will they be reassessed, perhaps? but we have hints from the letter the prime minister has written to the outgoing chancellor that things like the national insurance changes, and also the support for energy, those are going to stay and those cost tens of billions of pounds, so those

questions remain. what does it mean for debt, going forward and can she bring it down, the prime minister? how will you find that? and what does it mean for growth? and its lower taxes which might stimulate growth. and we heard the prime minister and we would be banned as it stands before any u—turn, we are still looking at the highest tax burden since the 1950s. just in terms of how _ burden since the 1950s. just in terms of how the _ burden since the 1950s. just in terms of how the markets - burden since the 1950s. just in terms of how the markets are | terms of how the markets are thinking about this stuff, and the policies, but it's more the fact that it policies, but it's more the fact thatitis policies, but it's more the fact that it is underfunded, and it meant tens of billions of pounds for extra government borrowing for years to come. ~ ., ~' government borrowing for years to come. ~ . ~ ., come. when we talk about the markets. _ come. when we talk about the markets, what _ come. when we talk about the markets, what we _ come. when we talk about the markets, what we are - come. when we talk about the markets, what we are talking l come. when we talk about the - markets, what we are talking about are the bond markets, the way that governments fund their borrowing and we are seeing the markets taking a

judgment and saying with this much to be borrowed, it is risky. the uk is a risky bet and we will have to pay investors a premium, and the other thing is that tax cuts tend to do is they drive up spending and therefore inflation. and you have to compensate for that, hence the increases in interest rates on bonds increases in interest rates on bonds in the way we have done, and that is why we have seen the highest rates for fixed term mortgages since the financial crisis. those rates have come down slightly in the last 2a hours or so and there is still a long way to go before we get to where we were prior to the mini budget and it's hard to think it was just three weeks ago. we budget and it's hard to think it was just three weeks ago.— just three weeks ago. we have the prime minister's _ just three weeks ago. we have the prime minister's statement - just three weeks ago. we have the prime minister's statement in - just three weeks ago. we have the prime minister's statement in a i just three weeks ago. we have the | prime minister's statement in a few minutes. do you think we will get an instant market reaction to what she says? will it be that immediate? quite frankly, friday afternoon is when the traders knock off early and head home. when the traders knock off early and head home-— head home. they've all gone home! what it tends _ head home. they've all gone home! what it tends to _ head home. they've all gone home! what it tends to mean _ head home. they've all gone home! what it tends to mean is _ head home. they've all gone home! what it tends to mean is that - head home. they've all gone home! what it tends to mean is that you i what it tends to mean is that you see volatile movements when the

people there are left because trading is thin, and if we get what we expect, what we have been primed for, this change in corporation tax, we might not see much. it depends how much further she goes or if you doesn't go that far. and also the indications she gets from the new chancellor and what happens next. for the moment, thank you. let's go back to vicki young in downing street. we are two or three minutes away potentially from the prime minister's statement. to what extent do you think she is fighting for her political life, just a few weeks into her premiership? i political life, just a few weeks into her premiership?- political life, just a few weeks into her premiership? i think she is. the issue _ into her premiership? i think she is. the issue about _ into her premiership? i think she is. the issue about sacking - into her premiership? i think she is. the issue about sacking the i is. the issue about sacking the chancellor is that they will take the blame and the heat of you. and see it is exposed and it was a joint programme something they had believed for many years, and an ideology, that they came in with and were determined to push through, and

she cannot say it was an idea she came up with and she disagrees. and he might say i'm not going to pursue it any longer and if you look at the resignation letters, both of them saying, we are right, we are writing what we want to do and the tax take is too high. we need better growth. i suppose you could say, i believe all that, but the timing is not right, but what most mps would say, is we told you that and you still went ahead, and that is the biggest problem she has got, that her rival for the leadership, rishi sunak set out is she is pursuing the agenda. and what she said would happen has happened and that's why we have not heard from him in public. and we had people campaigners saying around him but he has been proved right and we had and he is the prime minister and

could bring in talented people from the party. and that is what he is criticised for, bringing in around supporters and sacking those who said you were good as a minister and a good communicator, but you did not back me, so you are out, and that because the bad blood. s, back me, so you are out, and that because the bad blood. is. 11th back me, so you are out, and that because the bad blood.— because the bad blood. a lot of stories in the _ because the bad blood. a lot of stories in the newspaper - because the bad blood. a lot of stories in the newspaper about| because the bad blood. a lot of - stories in the newspaper about how the tory party feels it has got buyers remorse. we have seen that some tory backbenchers in reports are talking about replacing liz truss pretty soon with a kind of joint ticket of rishi sunak and penny mordaunt. yesterday i had mps suggesting that. penny mordaunt. yesterday i had mps suggesting that-— suggesting that. others suggested there were problems _ suggesting that. others suggested there were problems with - suggesting that. others suggested there were problems with that - suggesting that. others suggested there were problems with that and j there were problems with that and it's not that easy to do that. if you have a prime minister who does not want to go and we saw that with borisjohnson and it took not want to go and we saw that with boris johnson and it took virtually that his entire government had to resign for him to finally decide to go and if liz truss decides she wants to stay put and carry on, and it sounds like she does, then it's a

difficult thing to do and that kind of approach involves lots of other people deciding that they will put their personal ambition to one side, and i'm not sure we are in that place. i think there are lots of people in the cabinet now who think they might want a chance of being they might want a chance of being the next prime minister and i'm not sure that they would want to go along with conservative unity governments, if they weren't involved with it. and there has been so much bad blood and factions because of this churn of leaders. you have all of these people, and i think that is the attraction to liz truss ofjeremy hunt, he didn't serve under borisjohnson and has not been in the cabinet for three years so is not involved with all of that and that is possibly one of the reasons why she has chosen him. we may find out if she tells us why she thinks he is the man for thejob. you talk about the churn of tory leaders, and we have seen the churn of tory chancellors and you wonder, whoever is leader at the time of the

next general election, how much damage all of this will do politically to the conservative party? i think that is the overriding sense that i have been getting from conservative mps over the last few days. lots of them think that the damage is done, they think that borisjohnson and some of the chaos around all of that did an awful lot of damage, around all of that did an awful lot of dama-e, and around all of that did an awful lot of damage, around all of that did an awful lot of dama-e, and that this around all of that did an awful lot of damage, around all of that did an awful lot of dama-e, and that this is around all of that did an awful lot of damage, and that this is just compounded that. it is about the economy. one of the big thing that conservatives have said over the years is, we are confident, we are the ones to look after your money, we do things sensibly and it is the stick that they used to beat the labour party, for a very long time stop they simply won't be to do that at the next general election. they have lost that mean attack on the labour party. i think that is why so many labour party is the factory parties are so fearful. i've never seen them almost already giving up on the next election and again is the difference when we had other tory leaders pose. they were got rid

of because people thought that, actually, we can still win the next election. borisjohnson was there waiting in the wings, one for the minister said to me yesterday, there was a prince over the water, waiting to swoop in, somebody that lots of tory mps thought, if we get him on, he is going to win the election. he did. there is not that person standing there now to do that is why after so much despondency in the —— in the conservative ranks. there are some that still say, for the next two years in the next election, to turn around, but to do so, she is not onlyjumping her chancellor, but she also has to think about her attire approach, philosophy, programme for government, so where does that leave her authority? —— dumping her chancellor. ithink does that leave her authority? —— dumping her chancellor. i think that is what has got tory mps, that they just look at her and think, you have been not elected by the people to do this, borisjohnson won the election on a very different manifesto, command coming and trying to force this through, many of them are not willing to go along with her. thank ou for willing to go along with her. thank you for the — willing to go along with her. thank you for the moment. _ willing to go along with her. thank you for the moment. we _ willing to go along with her. thank you for the moment. we will- willing to go along with her. thank

you for the moment. we will go i willing to go along with her. thank you for the moment. we will go back just for a moment as we wait for the news conference at downing street. our economics correspondent, just picking up what we were just talking about, there are a lot of people in the city that has traditionally seen the city that has traditionally seen the conservative party as the party, in their view, other fiscal responsibility. i wonder how much surprise there hasn't been in the city and financial markets, that we had this mini budget, tens of billions of pounds worth of borrowing required, something they would not have expected from the conservative government?- would not have expected from the conservative government? know, the -a of conservative government? know, the party of representation _ conservative government? know, the party of representation has _ conservative government? know, the party of representation has been - conservative government? know, the party of representation has been the l party of representation has been the party of representation has been the party of representation has been the party of safe money, then you get this. i sat on the trading floor during many budgets and you can see tiny little minuscule movements, as they poured over the numbers, to see if they would add up. this will shock and or on a major scale, as far as they were concerned, they had never seen anything like this. just a decade ago, we were talking about austerity, and talking about george osborne, the then chancellor talking about the need to keep britain's credit rating... to borrow at very low rates indeed in the

international market. �* ., ., international market. and we go to downin: international market. and we go to downing street. _ international market. and we go to downing street. here _ international market. and we go to downing street. here is _ international market. and we go to downing street. here is the - downing street. here is the minister. ~ , good afternoon. my conviction that this country needs to go for growth is rooted in personal experience. i know what it is likely to grow up somewhere that is not feeling the benefits of growth. i saw what that meant and i'm benefits of growth. i saw what that meantand i'm not benefits of growth. i saw what that meant and i'm not proud 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. that is why, from day one, i have been ambitious for growth. since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth. i want to deliver a low tax, high wage, high growth economy. it is what i was elected, by my party to do. that mission remains. people

across this country rightly want stability. that is why we acted to support businesses in households with their energy costs this winter. it is also the case that global economic conditions are worsening, due to the continuation of putin's are polly were in ukraine. on top of this, debt was amassed, helping people through the pandemic. —— putin's appalling war. it was part that our budget went further than the markets were expecting force of the markets were expecting force of the way we are delivering 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. this will raise £18 billion per year. it will act as a down payment on our full

medium—term fiscal plan which will be accompanied by a forecast from the independent ob r. we will do whatever is necessary to ensure debt is failing as a share of the economy in the medium term. —— obr. we will show the size of the estate to make sure that taxpayer money is always well spent. we will become more efficient to deliver for the british people. and spending will grow less rapidly than previously planned. i met the former chancellor earlier today. i was incurably sorry to lose him. he is a great friend. —— incredibly. he shares my vision to set this country on the path to growth. today, i have asked jeremy hunt to become the new chancellor. he is one of the most experienced and widely respected government ministers and parliamentarians, and

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 that is protecting people from higher energy bills this winter. he will drive our mission to go for growth, including taking forward the supply side reforms that our country needs. we owe it to the next generation to improve our economic performance, to deliver higher wages, economic performance, to deliver higherwages, newjobs economic performance, to deliver higher wages, newjobs and better public services. and to ease the burden of debt. i have acted decisively today because my priority is ensuring our country's economic stability. as prime minister, i will always act in the national interest, and this is always my first consideration. 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. —— generations to come. i will now take questions. can i start with the telegraph? clearly a difficult day- _ start with the telegraph? clearly a difficult day. can _ start with the telegraph? clearly a difficult day. can you _ start with the telegraph? clearly a difficult day. can you expand - start with the telegraph? clearly a difficult day. can you expand to i start with the telegraph? clearly a | difficult day. can you expand to the public _ difficult day. can you expand to the public why— difficult day. can you expand to the public why you think you should remain— public why you think you should remain as — public why you think you should remain as prime minister, given you jumped _ remain as prime minister, given you jumped to _ remain as prime minister, given you jumped to keep tax cuts that lead you to _ jumped to keep tax cuts that lead you to be — jumped to keep tax cuts that lead you to be elected and got rid of your— you to be elected and got rid of your chancellor? i�*m you to be elected and got rid of your chancellor? i'm absolutely determined _ your chancellor? i'm absolutely determined to _ your chancellor? i'm absolutely determined to see _ your chancellor? i'm absolutely determined to see through - your chancellor? i'm absolutely| determined to see through what your chancellor? i'm absolutely l determined to see through what i have promised, to deliver a higher growth, more prosperous united kingdom, to csq through the stone we face. we have already delivered the energy price guarantee, making sure people are not facing huge bills this winter. but it was right in the face of the issues that we had that i acted decisively to ensure that we

have economic stability, because thatis have economic stability, because that is vitally important to people and businesses right across our country. harry cold. == and businesses right across our country. harry cold.— and businesses right across our country. harry cold. -- cole. thank ou, country. harry cold. -- cole. thank you. from — country. harry cold. -- cole. thank you. from the _ country. harry cold. -- cole. thank you, from the sun. _ country. harry cold. -- cole. thank you, from the sun. he _ country. harry cold. -- cole. thank you, from the sun. he stood - country. harry cold. -- cole. thank you, from the sun. he stood on - country. harry cold. -- cole. thank you, from the sun. he stood on a l you, from the sun. he stood on a platform — you, from the sun. he stood on a platform to — you, from the sun. he stood on a platform to win the leadership, and the platform to cut corporation tax, you and _ the platform to cut corporation tax, you and the — the platform to cut corporation tax, you and the chancellor, the x chancellor, designed this budget together, in lockstep, we are told, at times— together, in lockstep, we are told, at times in— together, in lockstep, we are told, at times in a — together, in lockstep, we are told, at times in a secret that, the two of you. _ at times in a secret that, the two of you. he — at times in a secret that, the two of you, he had to go because of the fallout from — of you, he had to go because of the fallout from it, how come you get to stay? _ fallout from it, how come you get to stay? me— fallout from it, how come you get to sta ? y . ., , . fallout from it, how come you get to sta ? g , ., i, fallout from it, how come you get to sta? g , ., i, , stay? my priority is making sure we deliver the economic _ stay? my priority is making sure we deliver the economic stability - stay? my priority is making sure we deliver the economic stability that i deliver the economic stability that our country needs. that is why i had to take the difficult decisions i have 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 are 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 as prime minister. chris mason. excuse the bluntness, prime _ chris mason. excuse the bluntness, prime minister, but everything that has happened, what ability do you have to _ has happened, what ability do you have to continue government? what i have to continue government? what i have done today _ have to continue government? what i have done today is _ have to continue government? what i have done today is made _ have to continue government? what i have done today is made sure - have to continue government? what i have done today is made sure that i have to continue government? transit i have done today is made sure that we have done today is made sure that we have economic stability in this country. jeremy hunt is a chancellor, is it somebody who shares my desire for a high growth, low tax economy. we recognise, because of current market issues

that we have to deliver the mission in a different way, and that is what we are absolutely committed to do about achieving that stability at what is a very difficult time globally. what is a very difficult time aloball . ~ , ., globally. prime minister, the former tory chancellor has _ globally. prime minister, the former tory chancellor hasjust _ globally. prime minister, the former tory chancellor hasjust said - globally. prime minister, the former tory chancellor hasjust said that. tory chancellor has just said that you have — tory chancellor has just said that you have totally trashed the tory party's _ you have totally trashed the tory party's election winning reputation for economic competence. will you apologise _ for economic competence. will you apologise to your party? i am determined _ apologise to your party? i am determined to _ apologise to your party? i am determined to deliver- apologise to your party? i am determined to deliver on - apologise to your party? i an 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 need to recognise that we are facing very difficult issues as the country and it was right in the national

interest i made the decisions i have made today to restore that economic stability so we can deliver, firstly, helping three people helping people through this winter with their energy bills, but making sure that our country is on the long—term footing for sustainable economic growth. thank you very much, everybody. studio: are pretty brief news conference there from the prime minister. announcing a u—turn in corporation tax, as you heard. she said it was clear that part of the mini budget went further and faster than the markets have been expecting, we need to act now to reassure the markets, we have to deliver the mission on a different way and lots of questions to her from some of the reporters there at that news conference about her own political future. that news conference about her own politicalfuture. let's that news conference about her own political future. let's get the assessment of our deputy political editor, vicki young who was

listening to that for us. has she done enough, do you think, to save her ownjob and to done enough, do you think, to save her own job and to stabilise the markets? ~ ., ., ., markets? well, we will have to wait and see whether _ markets? well, we will have to wait and see whether she _ markets? well, we will have to wait and see whether she has _ markets? well, we will have to wait and see whether she has done - markets? well, we will have to wait. and see whether she has done enough, but that was incredibly brief. she was saying that actually, her fundamental mission still stays the same, but she sounded like someone who was slightly irritated that the plan had not worked, and she is really saying that we just did it a bit faster and went a bit too far, to the markets, and i think there is lots in the tory party, certainly many in her parliamentary party think that it is much more fundamental than that, just getting rid of her chancellor won't be enough. one former cabinet minister said, welcome you just can't sack somebody smeantt —— implement your own policy, it makes no sense, but the big u—turn there, on corporation tax, saying that that change, that she wanted not to increase it it was a plan to increase it from 19 to 25%, she said it did not want it to

happen originally, but she has gone back to that, this is something that rishi sunak is chancellor brought in, and he thought that that would be the way to way to try to balance the books, bringing lots of revenue for the government, £18 billion per year. there was really all she said, in terms of any of the u—turns of the mini budget, on top of the other one when they decided not to cut to the highest rate of tax for the wealthiest. then she said, looking ahead again to october the 31st, that that full plan will still be lays out then, and that is when we get that independence, the obr, the office for budget responsibility, they run the numbers and they say, they run the numbers and they say, the numbers add up, and yes, you will get growth with this amount, or you won't. that is still going to be a crucial day, because really, she hasjust a crucial day, because really, she has just defers that, she has talked about the corporation tax change, as about the corporation tax change, as a down payment, but she was very careful to talk about fiscal discipline, fiscal responsibility,

but the public sector being more efficient, saying spending will grow less rapidly than in previously planned, she admitted the whole thing was very difficult. i think we need to know but won't know for a while is the conversations she has had withjeremy hunt. interestingly, when he stood in the last leadership race, he was knocked out early on, but he was calling for corporation tax to be cut to 15%. years has overseen changes might —— he has obviously changed his mind. you mentioned _ obviously changed his mind. you mentioned it _ obviously changed his mind. you mentioned it was _ obviously changed his mind. you mentioned it was a brief news conference. i think it was one of the briefest news conferences from a private minister i have ever seen. about ten minutes. and only took about three questions. —— prime minister. the questions focused on this was a joint plan with her chancellor that she sacked, what does this mean for her own political future, the question is? if he went, surely she would have to go? there is a big problem _ surely she would have to go? there is a big problem that _

surely she would have to go? there is a big problem that she _ surely she would have to go? there is a big problem that she has - surely she would have to go? tues is a big problem that she has got. everyone knows that this is her approach, what she wanted to do, they decided to do it in a certain way. and there were lots of mps yesterday talking about how liz truss was compared to margaret thatcher in many ways, that margaret thatcher in many ways, that margaret thatcher tried to do some very different and unpopular things, but making the point is that what you do first is you get the building blocks in place, so in terms of the approach of liz truss, that would make making sure that you get growth going, then you increase the size of the economy and then you might have the economy and then you might have the money to just then it do the tax cuts that you want to do. not the other way around. that has been that major blunder here. liz truss is part of all of this, her credibility, her authority do not like i should already, perhaps, that had difficulty with the backbenchers, in the first round of the leadership contest, only 50 of her own mps voted for her, so she was not the overwhelming choice of her party and that makes it very difficult, it makes it a very difficult, it makes it a very

difficult group of people to govern, there is an awful lot of former cabinet ministers, former ministers, lots of experience on the back bench, and all eyes now will be on them, how they feel that her position may be unsustainable, and if they decide to do something about it. ., ~ if they decide to do something about it. . ~ , ., if they decide to do something about it. . ~ i. ., if they decide to do something about it. thank you for that instant reaction- _ it. thank you for that instant reaction. stay _ it. thank you for that instant reaction. stay with _ it. thank you for that instant reaction. stay with us. - it. thank you for that instant reaction. stay with us. we i it. thank you for that instant i reaction. stay with us. we will cross alive now to dry the shadow work and pensions secretary, for labour. the prime minister has u—turn, which is what you are asking for. are you happy, are you satisfied?— for. are you happy, are you satisfied? �*, , . ., s, for. are you happy, are you satisfied? �*, , . ., ., satisfied? let's be clear what has 'ust satisfied? let's be clear what has just happened- — satisfied? let's be clear what has just happened. liz _ satisfied? let's be clear what has just happened. liz truss - satisfied? let's be clear what has just happened. liz truss has - satisfied? let's be clear what has i just happened. liz truss has sacked her chancellor for carrying out the policies of liz truss. a set of 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. an average of £500 more on a mortgage for many people per month. what is clear now is that we have a government in a meltdown and

the only party that can offer economic stability and certainty to homeowners across the uk, the only party that will be prudent and careful with the public finances and not cavalier with the public finances, and the only party that can grow the economy sustainably and spread prosperity and wealth is the labour party. this is clearly a disastrous set of decisions from a disastrous set of decisions from a disastrous budget. we not only need a change of chancellor but a change of prime minister. abshd a change of chancellor but a change of prime minister.— of prime minister. and that the measures _ of prime minister. and that the measures from _ of prime minister. and that the measures from the _ of prime minister. and that the measures from the mini - of prime minister. and that the | measures from the mini budget of prime minister. and that the - measures from the mini budget that she should have changed her nine —— mind on that she hasn't. ? you support and help the people their energy bills, so what would change in the mini budget that she did not announce in the news conference just now? it announce in the news conference 'ust now? ., , announce in the news conference 'ust now? . , . announce in the news conference 'ust now? ., , announce in the news conference 'ust now? , now? it was an absolutely disastrous bud . et and now? it was an absolutely disastrous budget and we _ now? it was an absolutely disastrous budget and we were _ now? it was an absolutely disastrous budget and we were pressing - now? it was an absolutely disastrous budget and we were pressing her- now? it was an absolutely disastrous budget and we were pressing her to | budget and we were pressing her to reverse it but we have still got the

problem that she has no plan to grow our economy, she has no plan to fix our economy, she has no plan to fix our public finances, she has no plan to rebuild our public services will stop homeowners are still facing an increase in their mortgages because of decisions that she took. of course, look, getting rid of the chancellor is understandable under circumstances, but at the end of the day, people are still facing increases in their mortgages because of liz truss. it is why we don't just need a change of chancellor, we need a change of approach and of government. but need a change of approach and of government-— need a change of approach and of rovernment. �* . , s, need a change of approach and of rovernment. �* . , ., ., government. but we have seen that on cororation government. but we have seen that on corporation tax. _ government. but we have seen that on corporation tax, what _ government. but we have seen that on corporation tax, what i'm _ government. but we have seen that on corporation tax, what i'm asking - government. but we have seen that on corporation tax, what i'm asking you i corporation tax, what i'm asking you is what other specific measures from the mini budget would you have liked to have seen a u—turn or a change of heart on from the prime minister? brute heart on from the prime minister? we were heart on from the prime minister? - were pressing for a change in the approach on corporation tax, and it pleased that she has listened to rachel reeves and keir starmer on that. we also warned that it was a catastrophic mistake to not allow the obr to validate that mini

budget, because it led to doubts on whether britain could finance the debts, so we are pleased that she has u—turned on that as well, but i think is more broadly tells you about thejudgment of think is more broadly tells you about the judgment of liz truss, but this is a government in utter meltdown. at the end of the day, when you have a government in meltdown, a prime minister whose political future continues to hang in the balance, what we actually need is notjust a change of chancellor, but we need a change of prime minister, it is only the labour party now that offers economic stability and certainty, can manage the public finances sensibly and rebuild public services. , .. sensibly and rebuild public services-— sensibly and rebuild public services. , ., ~ , ., ., ,, sensibly and rebuild public services. , ., �* . ., ., ,, services. john ashworth, thank you ve much services. john ashworth, thank you very much indeed. _ services. john ashworth, thank you very much indeed. we _ services. john ashworth, thank you very much indeed. we get - services. john ashworth, thank you very much indeed. we get some i very much indeed. we get some reaction from ian blackford, the snp's leader at westminster. he joins us as well. the prime minister, she said she was listening, the mini budget went further and faster, she said the markets were expecting it, we need to act now to reassure the markets, we have to deliver our mission in a different way. what those all

sensible statements from the prime minister? where you relieved to hear those statements from the prime minister? �* ., minister? and relieved that the chancellor _ minister? and relieved that the chancellor has _ minister? and relieved that the chancellor has gone _ minister? and relieved that the chancellor has gone and - minister? and relieved that the chancellor has gone and that i minister? and relieved that the | chancellor has gone and that we minister? and relieved that the - chancellor has gone and that we have seen at least some of the unfunded tax cuts that reverse the decline in corporation tax, taken off the table, but we can't lose sight of the damage that has been done. we have had a cataclysmic time in the financial markets and the harsh reality of this is that in the end, millions of people are going to be paying more for their mortgages as a consequence of everything that we have gone through over the course of the last few weeks. the person is ultimately responsible for that is the prime minister. this was her plan, it was economic illiteracy to think that at a time to make sure that we were supporting people through the energy crisis, that the prime minister could embark on uncosted tax cuts and that is why the financial markets have been in the financial markets have been in the meltdown that they have been in. the real damage of this is it has

undermined the ability of the uk in financial markets, notjust here but globally, and there is a paean that has been demanded by financial institutions of liz truss, and ultimately the prime minister is going to have to accept her responsibility, i suspect she will ultimately be removed from office, but this has been a black period for us. we have been living in difficult times, that have now been made much worse, quite simply because of the incompetence of the prime minister. that is why, ultimately, she has to accept responsibility and conservative mps, except the responsibility, the opportunity to do something, they need to look at themselves, because it is our constituents that are going to be facing higher mortgage costs. but ou are facing higher mortgage costs. but you are saying they need to bring in another leader?— another leader? they have to accept their responsibilities. _ another leader? they have to accept their responsibilities. i _ another leader? they have to accept their responsibilities. i want - another leader? they have to accept their responsibilities. i want to - their responsibilities. i want to see an election for those of us from scotland, we can see the shambles playing out, we were told way back in 2014 when we had the independence

referendum that the strength and stability of the uk, well that has been blown apart. d0 stability of the uk, well that has been blown apart.— stability of the uk, well that has been blown apart. do we need to see another prime minister, though? - been blown apart. do we need to see another prime minister, though? we| another prime minister, though? we have already had our fourth chancellor of the year. do we need to see another change of tory leader? ~ ., to see another change of tory leader? s ., , , , leader? we do, because it is the prime minister _ leader? we do, because it is the prime minister in _ leader? we do, because it is the prime minister in the _ leader? we do, because it is the prime minister in the end - leader? we do, because it is the prime minister in the end it - leader? we do, because it is the prime minister in the end it has| leader? we do, because it is the i prime minister in the end it has to take responsibility for this. to go through a period where we have had four or chancellor is within a year, itjust four or chancellor is within a year, it just shows you four or chancellor is within a year, itjust shows you the shambles that has been taking place within the conservative government. we have had lots of talk and we heard it from the prime minister again to gain about growth, there is no detail and substance, and we published elite —— energy plan last week, one that would see our green energy increase fivefold, 385,000 jobs created, a platform that would see the opportunities for intensive industry to invest in scotland, then is a future that we are offering people in scotland. but we have chaos and a crisis, a debt crisis that has been

created by the incompetence of this government, led by liz truss. but the markets _ government, led by liz truss. but the markets were calling for change to the mini budget, opposition politicians like you were calling for change and she has just announced change, she has announced announced change, she has announced a u—turn. surely she has done what everyone was asking her to do? there are massive — everyone was asking her to do? there are massive problems _ everyone was asking her to do? there are massive problems in _ everyone was asking her to do? there are massive problems in the - everyone was asking her to do? tues are massive problems in the uk economy and that has been talked about by a number of commentators over the course of the last few days. the fact remains that if you go over the last 20 year period, it has been traditional and that has been a premium on a uk debt markets simply because of the challenges that the uk faces. we have and important —— an enormous current account deficit and we are going to remain in difficult times, notwithstanding the changes that have taken place, but it is a lack of a plan, the fact that we are outside the european union, which has caused so much damage to us, because it limits our ability to trade, and it is that contrast of staying on the path of united kingdom, for those of us in scotland that want to get on that life trough

of independence back into the european union, and that opportunity of a green, sustainable future with investment evidence for the economy, people he will face that choice of what kind of future we want to have. —— a life raft. what kind of future we want to have. -- a life raft-— -- a life raft. thank you very much for our -- a life raft. thank you very much for your life _ -- a life raft. thank you very much for your life reaction _ -- a life raft. thank you very much for your life reaction there, - -- a life raft. thank you very much for your life reaction there, ian - for your life reaction there, ian blackford. let's get to analysis from our economics correspondent who has been with me here in the studio. what do you think the markets will make of all of that? to what do you think the markets will make of all of that?— make of all of that? to be honest with ou, make of all of that? to be honest with you. not _ make of all of that? to be honest with you, not much. _ make of all of that? to be honest with you, not much. the - make of all of that? to be honest with you, not much. the reason i | make of all of that? to be honest. with you, not much. the reason i say thatis with you, not much. the reason i say that is because we were expecting exactly what we had from the prime minister, we had that u—turn on the planned abolition of the rise in corporation tax rate, and at the same time, they have many questions that remain unanswered. as we sit here and when —— and look at where the markets sterling is still a bit ahead of rate was at that mini budget, having dipped, but when we look at the bigg market, the bond market, the borrowing costs implied for government and for households, they are still quite a bit above

where they were, pre—mini budget. in that sense, anxiety is heightened, why is that? because we did not have the fundamental question is that? because we did not have the fundamental questions answered there. we did have some of the money removed from the public sector's tab, that £18 billion worth of cost in the corporation tax rates that that would have cost, but on the other hand, there is so much remaining. there is £25 billion of unfunded tax cuts that remains, we shall have the energy package, we do not know how they are going to be funded. we should talk there about wanting more growth, prime ministers all at once that, of course, but the plan has been dilated today because one plank has been taken away. this idea is one of reducing debt while not cutting the overall amount of public spending, economists are saying that is a huge question over that. where this leaves us is if we look at what is on the table, we have companies which are in confusion with a constant change of government policy. you have a public sector being told they may not have

budgets which match inflation and they are already falling behind in that regard. that is not a basis for growth, so you can see why economists, markets remain very jittery. the hard and fast answers, we are still having to wait until the end of the month. it is numbers that they deal with and not words. what more could she have done in that very brief statement from downing street? very few answers for the three questions and i think she took from reporters? what else could she have done that would further have satisfied the market and calmed the markets? it have satisfied the market and calmed the markets?— the markets? it would go all the way back to three — the markets? it would go all the way back to three weeks _ the markets? it would go all the way back to three weeks ago, _ the markets? it would go all the way back to three weeks ago, hearing i back to three weeks ago, hearing back to three weeks ago, hearing back then, analysts saying, show us that money. show us the assessment from your watchdog. from a budget responsibility. we have to wait until the 31st of october. explain to us exactly how this all hangs together. what we have at the moment, those tax cuts, they tend to put more pressure on inflation, unless you have the supply side measures. she mentioned them, that they take time to works, so

economists are unconvinced, but what they want to see if the obr has rubber—stamped these, but the risk of lending to the uk is gone up. that is why people up and down the country are currently facing higher mortgage rates than they would have done. i mortgage rates than they would have done. s , mortgage rates than they would have done. ~ , done. i think she said the medium term fiscal — done. i think she said the medium term fiscal plan — done. i think she said the medium term fiscal plan is _ done. i think she said the medium term fiscal plan is still _ done. i think she said the medium term fiscal plan is still scheduled i term fiscal plan is still scheduled for 31st of october, halloween, so some pressure to bring it forward, again, but that won't happen? we are still auoin again, but that won't happen? we are still going to — again, but that won't happen? we are still going to have _ again, but that won't happen? we are still going to have to _ again, but that won't happen? we are still going to have to wait _ again, but that won't happen? we are still going to have to wait until- still going to have to wait until the answers of the big questions come through, that may not then be the end of it. that they may be come through on trick or treat, with the markets may be being happy, but it depends whether the obr thinks that the government's plans are credible. it all hinges on that. credibility is incredibly easy to lose with financial markets. it is very hard to regain. 50 financial markets. it is very hard to retain. h financial markets. it is very hard to retain. �*, ., financial markets. it is very hard to regain-— financial markets. it is very hard to retain. �*, . ., ., to regain. so let's have a look at the markets. _ to regain. so let's have a look at the markets. you _ to regain. so let's have a look at the markets. you said _ to regain. so let's have a look at the markets. you said the - to regain. so let's have a look atj the markets. you said the pound to regain. so let's have a look at - the markets. you said the pound has fallen slightly. i suppose the prime minister would have hoped to see a

huge bounce. minister would have hoped to see a huge bounce-— minister would have hoped to see a hue bounce. . . ., huge bounce. indeed. we have heard her and other— huge bounce. indeed. we have heard her and other senior _ huge bounce. indeed. we have heard her and other senior ministers - her and other senior ministers talking about the fact that there has been turmoil on global markets and that is true, there is a tricky time for the global economy, because of the war, the high inflation, the cost of living, there are big questions over prosperity around the globe for next year but if we separate out what is happening on a global markets, from what has been happening in the uk, you can see we have broken away in some regard. there is the premium, the premium of liz truss, that has to be paid to hold money in the uk and that is because the uk is seen as a riskier bet. it is not what she would have liked to have seen, but i think we are a way off from seeing the markets calmed down. i are a way off from seeing the markets calmed down. i suppose there is time. markets calmed down. i suppose there is time- things — markets calmed down. i suppose there is time. things might _ markets calmed down. i suppose there is time. things might settle _ markets calmed down. i suppose there is time. things might settle down - markets calmed down. i suppose there is time. things might settle down in i is time. things might settle down in the next few days.— the next few days. markets are very fickle. we have _ the next few days. markets are very fickle. we have some _ the next few days. markets are very fickle. we have some definite - the next few days. markets are very fickle. we have some definite we i fickle. we have some definite we have seen some very sharp movements but quite frankly, they will want to see the detail, but they want to be

able to take the leap of faith but could ability has been so broken, it is unlikely at the moment. you can see more volatility in the meantime, likely, but not less. the key thing will be to watch the bonds, the things that signify borrowing costs. it is notjust households, it is the government's bill as well. don't forget, as it stands right now, the government is likely to have to borrow almost £200 billion this year to fund its plan. it has already been looking at an interest bill on those plans, in excess of £100 million next year. it is climbing every time those borrowing costs climb. —— 100 billion. there has been less money for those things. this government has not been able to get its way out for an economic crisis at the moment.— get its way out for an economic crisis at the moment. plenty for those on the — crisis at the moment. plenty for those on the market _ crisis at the moment. plenty for those on the market at - crisis at the moment. plenty for those on the market at the - crisis at the moment. plenty for - those on the market at the moment. bond dealers and all the rest of them, for them to take stock, to digests what has been happening today on a pretty tumultuous day, politically, and with these latest enactments from the prime minister.

as we were saying earlier, friday afternoon is normally the time you knock up a bit early on the financial markets! you would like to think that nothing major really happens! d0 think that nothing ma'or really ha ens! ,, ~ think that nothing ma'or really hauens! ~ , think that nothing ma'or really ha ens! ~ , ., happens! do you think they would have stuck around, _ happens! do you think they would have stuck around, perhaps, - happens! do you think they would - have stuck around, perhaps, knowing that there is a lot going on his mac may be an early start to the weekend might have been shelved when they saw how things were going on. we have saw how things were going on. - have seen is absolutely extraordinary. i have not seen this sort of thing in decades, after covering the market. we have never seen a chance do a midnight flit back from the imf, to come back and get the sack. that does not inspire confidence in the uk's position within the global markets. i think we have a way to go, we will find, to get to that, even though we are operating in a very tumultuous atmosphere anyway. thank you very much indeed. let's recap on the news conference and we've been hearing in the last half hour or so, a brief news conference from the prime minister liz truss in which she made another huge u—turn

on the mini budget from last month, reversing her plan to scrap the increase in corporation tax. the move followed the sacking earlier on today of her chancellor, kwasi kwarteng. he is being replaced by former health and foreign secretary jeremy hunt. liz truss insisted that she will, quote, always act in the national interest and said her government will get through the storm. she was asked if she would resign as prime minister and she said i am absolutely determined to see through what i have promised. the labour party said the government is in meltdown. let's listen to some of what the prime minister had to say. of what the prime minister had to sa . ~ , of what the prime minister had to sa . g _, . ., of what the prime minister had to sa. _,, of what the prime minister had to sa. _, , ., of what the prime minister had to say. my conviction is that this country needs _ say. my conviction is that this country needs to _ say. my conviction is that this country needs to go - say. my conviction is that this country needs to go for - say. my conviction is that this | country needs to go for growth say. my conviction is that this - country needs to go for growth which is rooted in my personal experience. i know what it is like to grow up somewhere that is not feeling the benefits of growth. i saw what that meant. and i'm not prepared to accept that for our country. i want 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. that's why, from day one, i've been ambitious for growth. since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth. i want to deliver a low tax, high wage, high growth economy. it's what i was elected by my party to do. that mission remains. people across this country rightly want stability. that is why we acted to support businesses and households with their energy costs this winter. it's also the case that global economic conditions are worsening due to the continuation of putin's appalling war in ukraine. and on top of this, debt was amassed helping people through the covid pandemic. but it's clear that parts of our mini budget

went further and faster than markets were expecting, 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. this will raise £18 billion per year. it will act as a down payment on our full, medium—term fiscal plan, which will be accompanied by a forecast from the independent obr. we will do whatever is necessary to make sure that debt is falling as a share of the national economy in the medium term. we will control the size of the state to ensure that taxpayers money is always well spent. 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. i met the former

chancellor earlier today. i was incredibly sorry to lose him. he is a great friend, and he shares my vision to set this country on the path to growth. today, i have asked jeremy hunt to become the new chancellor. he is one of the most experienced and widely respected government ministers in —— and parliamentarians. and 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 that is protecting people from higher energy bills this winter. and he will drive our mission to go for growth, including taking forward the supply—side reforms that our country needs. we owe it to our next generation to improve our economic

performance, to deliver higher wages, newjobs and better public services. and to ease the burden of debt. i have acted decisively today, because my priority is ensuring our country's economic stability. as prime minister, i will always act in the national interest. this is always my first consideration. 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. the prime minister at a very short news conference in downing street in the last hour or so. a short statement followed by just three questions from reporters and answers. let's go to our economics editor who is in washington, which is where the former chancellor was

until recently. he boarded the last plane out of there to come back to london to be sacked. what are your thoughts on the last extraordinary 24 hours, and from what you have heard of what liz truss said, is it enough to calm the financial markets?— enough to calm the financial markets? �* , ., , markets? i've never seen anything like it. markets? i've never seen anything like it- we — markets? i've never seen anything like it. i've never— markets? i've never seen anything like it. i've never seen _ markets? i've never seen anything like it. i've never seen anything i like it. i've never seen anything like it. i've never seen anything like a chancellor of the exchequer coming to an important international meeting and selling his policies to the world's biggest central bank, the world's biggest central bank, the worlds biggest finance ministers and then being hauled back as is evident now, by the prime minister on that last plane out of washington yesterday, cancelling meetings and being fired before via political correspondent twitter, before he even arrived at 10 downing street. this is extraordinary stuff. he was obviously defiant when i spoke to him about this. i spent more time with him in the last 24 hours than

anyone else and it was clear to me that he felt there would not necessarily have to be a u—turn on theissue necessarily have to be a u—turn on the issue of corporation tax. i gave him for opportunities to roll the pitch to prepare for some sort of rehearsal and he did not take it, so i concluded from that that the former chancellor was not fully on—board with the idea of rowing back the corporation tax cut, or not going forward with an increase, so it does not surprise me that having got back he was fired. and the reaction in the markets is that it is stable and the u—turn has been received in the way you would expect, which is borrowing costs versus yesterday and last week, at a time when we expected the bank of england emergency funding to be withdrawn, it's going in the right direction. sterling has gone on the right direction and you heard that a

down payment, from liz truss, on fiscal credibility that was frankly lost over the past month. so that is a significant turnaround, fiscally. £18 billion per year is what that raises, that corporation tax rise. it was rishi sunak�*s corporation tax rise that liz truss will an act which is an extraordinary thing given the tenor of the arguments we saw within the conservative leadership campaign. but it's more than that. although i think the liz truss administration will start a slow process of trying to win back economic credibility with this and with a new chancellor, but i do question what it does for liz truss economics, because part of that was saying that corporation tax cuts generate their own money and you don't generate money from raising corporation tax. and that was the point of the economic policy. so in

accepting the argument that it raises £18 billion a year, what is left of her philosophy. for everything else? and we don't know how much survives and that is what won her the conservative party campaign. and it is the start of a process of unfinished business of winning back economic credibility. but people i talk to here say that damage has been done right now that could last for some time. there are extra premiums on government borrowing for the uk. the uk looks like a place where things are happening that only normally you would expect to happen in emerging economies, currency fluctuations every day, borrowing costs going up and down by huge amounts, chancellor is coming back on planes and being fired and we are not entirely sure where policy goes. it's the start of

a process of winning back economic progress —— policies and fundamental arguments about when the economy works is quite another question, ben. , ., ., ., works is quite another question, ben. ., , works is quite another question, ben. . ., ben. good to see you in washington. just to say that _ ben. good to see you in washington. just to say that jeremy _ ben. good to see you in washington. just to say that jeremy hunt, - ben. good to see you in washington. just to say that jeremy hunt, named | just to say thatjeremy hunt, named as the new chancellor of the exchequer, we gather he is at home at the moment and we are not sure where we will hear from him imminently but we hope to hear from him soon. he is at home, but no comment from him as yet as being appointed as the new chancellor of the exchequer. reaction now from sir ed davey, leader of the liberal democrats. you heard the prime minister with a u—turn on corporation tax. is that enough, do you think? liz corporation tax. is that enough, do ou think? , , ., , corporation tax. is that enough, do ou think? ,, .,, , you think? liz truss has trust -- trashed the _ you think? liz truss has trust -- trashed the british _ you think? liz truss has trust -- trashed the british economy, i you think? liz truss has trust --| trashed the british economy, but hundreds of pounds on peoples mortgages and humiliate the conservative government in the eyes of the world. people are angry and

fed up and worried about the future, but above all, they are furious with this conservative party. i think it is time they have their say. it is time for the general election. that is not very — time for the general election. that is not very likely, _ time for the general election. that is not very likely, is _ time for the general election. that is not very likely, is it, _ time for the general election. that is not very likely, is it, to be honest. so are you happy now that jeremy hunt is the new chancellor of the exchequer and it looks like a change of direction from the economy?— change of direction from the econom ?, , �*, ., ., . ~ economy? jeremy hunt's a track record on — economy? jeremy hunt's a track record on the _ economy? jeremy hunt's a track record on the nhs _ economy? jeremy hunt's a track record on the nhs on _ economy? jeremy hunt's a track record on the nhs on the - economy? jeremy hunt's a track record on the nhs on the nhs . economy? jeremy hunt's a track l record on the nhs on the nhs and economy? jeremy hunt's a track - record on the nhs on the nhs and the social care system is in the chaos partly because ofjeremy hunt's record as secretary of state for health and when you look at his eye diaz on the economy, when he had his bid to be the tory leadership, he wanted cuts in corporation tax larger than liz truss —— his ideas. i don't have confidence with him on the health service or his competence on the economy with jeremy the health service or his competence on the economy withjeremy hunt. what would you like to hear that you did not hear in terms of calming the

markets? should she have gone further? �* ., ., , markets? should she have gone further? . ., , ., markets? should she have gone further? �* . ., , ., , further? i've already told you they should be a _ further? i've already told you they should be a general— further? i've already told you they should be a general election - further? i've already told you they i should be a general election because i think it would calm the markets. just in terms of economic policy. economic policy is clear. we need a new budget. this budget they put forward has caused this economic turmoil and is hurting people. they did not even get the energy support package right for people and businesses, so i'm afraid their whole economic policy is wrong and they need to go back to the drawing board. we need to make sure that the tax position is credible in the markets, so interest rates won't go up markets, so interest rates won't go up so high, and that's why the liberal democrats were the first party to call for a windfall tax on oil and gas companies, so we have the money to provide help for people. d0 the money to provide help for --eole. ,. the money to provide help for --eole. ~' the money to provide help for --eole. ~ ,, people. do you think liz truss can survive as — people. do you think liz truss can survive as prime _ people. do you think liz truss can survive as prime minister? - people. do you think liz truss can survive as prime minister? she i survive as prime minister? she shouldn't and _ survive as prime minister? she shouldn't and they _ survive as prime minister? sue: shouldn't and they should be a general election. we can't have yet

another unelected prime minister foisted on the british people by the conservative party. i think people are generally angry with the conservative party and they should have their say and they should be a general election. but have their say and they should be a general election.— general election. but do you think to mps general election. but do you think tory mps will _ general election. but do you think tory mps will move _ general election. but do you think tory mps will move against - general election. but do you think. tory mps will move against her and possibly bring in rishi sunak? that was a rumour. i’zre possibly bring in rishi sunak? that was a rumour-— possibly bring in rishi sunak? that was a rumour. �* ., ., was a rumour. i've heard some of the a-ossi was a rumour. i've heard some of the gossip from — was a rumour. i've heard some of the gossip from around _ was a rumour. i've heard some of the gossip from around westminster, - gossip from around westminster, often through bbcjournalist, and i don't think the prime is the's position is strong and i never thought she would be a good prime minister but to be honest i'm reflecting to you what i think many british people feel and when i go on the doorsteps they are angry with this government and last year in the last 12 months the liberal democrats beat the conservatives in three historic by—elections in true blue areas, bucks, north shropshire, a seat held for 200 years in east devon and when we were talking to people just back then before the calamitous mini budget, people were angry with the conservative party.

we are out of time, but thanks for being with us. you have been watching special coverage here on bbc news of the political crisis. let's remind you of the main developments today. the prime minister liz truss has made a not a huge u—turn on her mini budget from last month reversing her plans to scrap an increase in corporation tax and the chancellor, kwasi kwarteng has been sacked after flying back from washington and has been replaced by the health secretary and the former foreign secretary and let's have a listen to what the prime minister said a short time ago at her news conference. my conviction is that this country needs to go for growth which is rooted in my personal experience.

i know what it is like to grow up somewhere 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. that's why, from day one, i've been ambitious for growth. since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth. i want to deliver a low tax, high wage, high growth economy. it's what i was elected by my party to do. that mission remains. people across this country rightly want stability. that is why we acted to support businesses and households with their energy costs this winter. it's also the case that global economic conditions are worsening due to the continuation of putin's appalling war in ukraine. and on top of this, debt was amassed helping people

through the covid pandemic. but it's clear that parts of our mini budget went further and faster than markets were expecting, 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. this will raise £18 billion per year. it will act as a down payment on ourfull, medium—term fiscal plan, which will be accompanied by a forecast from the independent obr. we will do whatever is necessary to make sure that debt is falling as a share of the national economy in the medium term. we will control the size of the state to ensure that taxpayers money

is always well spent. 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. i met the former chancellor earlier today. i was incredibly sorry to lose him. he is a great friend, and he shares my vision to set this country on the path to growth. today, i have asked jeremy hunt to become the new chancellor. he is one of the most experienced and widely respected government ministers and parliamentarians. and 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 that is protecting people from higher energy bills this winter. and he will drive our mission to go for growth, including taking forward the supply—side reforms that our country needs. we owe it to our next generation to improve our economic performance, to deliver higher wages, newjobs and better public services. and to ease the burden of debt. i have acted decisively today, because my priority is ensuring our country's economic stability. as prime minister, i will always act in the national interest. this is always my first consideration. 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. i will now take questions. can i

start with ben riley smith of the telegraph? start with ben riley smith of the teleu-rah? ., , start with ben riley smith of the teleu-rah? . , ., start with ben riley smith of the teleu-rah? . ,~ , s start with ben riley smith of the teleu-rah? ., _. ' . telegraph? clearly a difficult day. can ou telegraph? clearly a difficult day. can you explain — telegraph? clearly a difficult day. can you explain to _ telegraph? clearly a difficult day. can you explain to the _ telegraph? clearly a difficult day. can you explain to the public- telegraph? clearly a difficult day. can you explain to the public why | can you explain to the public why you think— can you explain to the public why you think you should remain as prime minisier— you think you should remain as prime minister whereas you have junked a key tax _ minister whereas you have junked a key tax cut— minister whereas you have junked a key tax cut that led you to be elected — key tax cut that led you to be elected and got rid of your chancellor? | elected and got rid of your chancellor?— elected and got rid of your chancellor? i am absolutely determined _ chancellor? i am absolutely determined to _ chancellor? i am absolutely determined to see - chancellor? i am absolutely determined to see through | chancellor? i am absolutely - determined to see through what i have promised, to deliver a higher growth more prosperous uk to see us through the storm we face. we have delivered the energy price guarantee making sure people are not facing huge bills this winter. it was right in the face of the issues that we had that i acted decisively to make sure we have economic stability because that is vitally important to people and businesses across the country. harry cole. you

people and businesses across the country. harry cole.— people and businesses across the country. harry cole. you were the one that wanted _ country. harry cole. you were the one that wanted to _ country. harry cole. you were the one that wanted to cut _ country. harry cole. you were the one that wanted to cut the - country. harry cole. you were the one that wanted to cut the 45p i country. harry cole. you were the i one that wanted to cut the 45p rate. you stood _ one that wanted to cut the 45p rate. you stood on a platform to win the leadership— you stood on a platform to win the leadership of the conservative party to cut _ leadership of the conservative party to cut corporation tax and you and the chancellor, the x chancellor decided — the chancellor, the x chancellor decided to come together in lockstep, we are told, at times in secret, _ lockstep, we are told, at times in secret, the — lockstep, we are told, at times in secret, the two of you. he has to go because _ secret, the two of you. he has to go because of— secret, the two of you. he has to go because of the fallout from it. how come _ because of the fallout from it. how come you _ because of the fallout from it. how come you get to stay? my priority is making _ come you get to stay? my priority is making sure — come you get to stay? my priority is making sure we deliver the economics ability— making sure we deliver the economics ability our— making sure we deliver the economics ability our country needs. -- economic— ability our country needs. » economic stability. that is why i took the difficult decisions i have taken today. the mission remains the same. we need to raise our country's economic growth levels and deliver for people across the country and we are committed to delivering on the energy price guarantee which people are already seeing in their bills. but ultimately, we ultimately need to make sure we have economic stability and i have to act in the

national interest as prime minister. chris mason. national interest as prime minister. chris mason-— national interest as prime minister. chris mason. excuse the bluntness, prime minister, _ chris mason. excuse the bluntness, prime minister, but _ chris mason. excuse the bluntness, prime minister, but given _ chris mason. excuse the bluntness, | prime minister, but given everything that has— prime minister, but given everything that has happened, what credibility do you _ that has happened, what credibility do you have to continue in government?— do you have to continue in rovernment? s . ., ., ., government? what i have done today is made sure — government? what i have done today is made sure that _ government? what i have done today is made sure that we _ government? what i have done today is made sure that we have _ government? what i have done today is made sure that we have economicl is made sure that we have economic stability in this country. jeremy hunt as chancellor is somebody who shares my desire for a high growth, low tax economy. we recognise because of current market issues that we have to deliver the mission in a different way. that is what we are absolutely committed to doing, achieving that stability at what is achieving that stability at what is a very difficult time, globally.

robert peston.— a very difficult time, globally. robert peston. ~ , robert peston. prime minister, the former tory — robert peston. prime minister, the former tory chancellor, _ robert peston. prime minister, the former tory chancellor, philip - former tory chancellor, philip hammond, hasjust said that you have totally— hammond, hasjust said that you have totally trashed the tory party's election— totally trashed the tory party's election winning reputation for economic— election winning reputation for economic competence. will you apologise to your party? i am determined _ apologise to your party? i am determined to _ apologise to your party? i am determined to deliver- apologise to your party? i am determined to deliver on - apologise to your party? i an 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 double helping people through this winter and next winter with their energy bills, also making sure that our country is on the

long—term footing for sustainable economic growth. thank you very much, everybody. the prime minister at a very short news conference in downing street in the last hour or so. one of the shortest prime ministerial news conferences i've ever seen. about eight minutes, we timed that as, and only four questions in all, not three as i previously said, but four questions in pretty short answers to those questions as well. so a brief appearance from the prime minister. our economic correspondence was watching and listening. the question is, how is it done enough to reassure the markets, because what started all of this was the reaction of the financial markets, and the mini budgets last month. abs, of the financial markets, and the mini budgets last month. a seismic move in the — mini budgets last month. a seismic move in the markets _ mini budgets last month. a seismic move in the markets for _ mini budgets last month. a seismic move in the markets for what - mini budgets last month. a seismic move in the markets for what was i mini budgets last month. a seismicj move in the markets for what was a 13 minute statement from the former chancellor three weeks ago and here we have eight minutes that failed to calm them because as we speak the pound has slipped on the back of the prime minister's comments and we've

seen borrowing costs as measured by the government bonds up on the day. why is that? in part, because they were expecting the u—turn we saw on corporation tax but they still had many questions about how all of this will be funded and i say all of this because there's tens of billions of pounds of plans unveiled by the government which are yet to be funded or we don't know how they will be funded and on top of that, what does it mean for growth? as we sit here right now, i've been hearing from economists across the city and a lot of them are saying that what we see now means that borrowing costs, as denoted by the bond markets are above where they were three weeks ago ahead of the mini budget. and what it means is that households and businesses still face much more bills if they are looking to take out new loans and they are using the word recession, not growth, growth, growth, but still a downturn next year and they say we are looking at that as we speak right now and when we talk about corporation tax rates not

rising, or rising once again, sorry, so many u—turns i don't know where we are. but that's another thing that takes money out of the pockets of business, money they may have invested or used to create jobs, so as we sit here now, there are warnings across the city that we could be looking at higherjob losses over the next couple of years than we might have expected, so as far as the markets are concerned, all eyes on the 31st of october. who knows what we could see ahead of that. ., ., ., , .,, , that. there were a lot of phrases the prime _ that. there were a lot of phrases the prime minister _ that. there were a lot of phrases the prime minister used - that. there were a lot of phrases the prime minister used like - that. there were a lot of phrases the prime minister used like we | that. there were a lot of phrases i the prime minister used like we will do whatever is necessary to ensure debt is falling as a share of the economy, and spending will grow less rapidly than previously planned, but in terms of hard specifics and numbers all we heard was on corporation tax, the u—turn, that would mean £18 billion more in terms of government revenue.— of government revenue. that's absolutely _ of government revenue. that's absolutely right _ of government revenue. that's absolutely right and _ of government revenue. that's absolutely right and we - of government revenue. that's absolutely right and we could i of government revenue. that's - absolutely right and we could have said that ahead of the speech. that

is the detail we did get with a mini budget but we are still left in the dark about how we join the dots and fill the gaps between the statements because there is £18 billion that's not going to be on the tab for the public sector, but there are still £25 billion worth of tax changes that were unveiled three weeks ago. the energy help package on top of that we don't know how it will be funded and we still don't know as we heard how they're talking about that debt could be brought down and we will have to see spending increases smaller than we are used to, which is code for them not match inflation and when we see the departmental budgets, they are not keeping up with the inflation that has gone much higher and much faster than anyone expected, so public services are already under pressure and there is a lot riding on what we see now in the 31st of october and if there's any hint of a thumbs down from the official watchdog, brace yourself for more turmoil. brute

from the official watchdog, brace yourself for more turmoil. we are braced. yourself for more turmoil. we are braced- good _ yourself for more turmoil. we are braced. good to _ yourself for more turmoil. we are braced. good to have _ yourself for more turmoil. we are braced. good to have your- yourself for more turmoil. we are l braced. good to have your company yourself for more turmoil. we are - braced. good to have your company on this momentous day, and thank you, and we can talk to a tax expert and ceo. thank you for being with us. what is your immediate reaction to what the prime minister said today? another unbelievable u—turn and we'd already had the 45%, but we weren't expecting the corporation tax would be reined back like it has been and we expected the government would have backed businesses with their growth agenda and really pushed through the 19% retention of the cooperation tax rate. this is not a tax cut, its worth remembering, it's a tax increase that will take effect from next april. [30 it's a tax increase that will take effect from next april.- it's a tax increase that will take effect from next april. do you think the markets — effect from next april. do you think the markets will _ effect from next april. do you think the markets will be _ effect from next april. do you think the markets will be reassured - effect from next april. do you think the markets will be reassured by i effect from next april. do you thinkl the markets will be reassured by the fact we have a new chancellor instead of kwasi kwarteng? we've seen that the _ instead of kwasi kwarteng? we've seen that the pound _ instead of kwasi kwarteng? we've seen that the pound has _ instead of kwasi kwarteng? we've seen that the pound has been - seen that the pound has been

trending downwards even during the prime ministerial statement. what this does do is give a bit of reassurance to the markets that some of the extra revenue generated through the corporation tax increase, some 18 billion a year that the government estimate, that number could be a bit lower and we have heard the recession word being mentioned and if profits and businesses do suffer then corporation tax receipts go down so it's not a case of increasing the rate and more revenue is generated, we need businesses to succeed, but this 18 billion or estimated 18 billion generated from next april, in my view, that covers the basic rate income tax cut to 19% and the reversal of national insurance and both of those measures are the equivalent of what is about to be raised in the books need to be balance and there are some unfunded

cuts that the former chancellor mentioned in his mini budget a few weeks ago and we still don't know how those will be paid for and all eyes will be on the markets on the 3ist eyes will be on the markets on the 31st of october and halloween for the government. is it 31st of october and halloween for the government.— 31st of october and halloween for the government. is it the case that once the markets _ the government. is it the case that once the markets are _ the government. is it the case that once the markets are spooked, - the government. is it the case that| once the markets are spooked, and they have been spooked, it's hard to spook them? i they have been spooked, it's hard to spook them?— spook them? i think that is right. we have seen _ spook them? i think that is right. we have seen this _ spook them? i think that is right. we have seen this trending - we have seen this trending ever since boris left and there has been a downward spiral, but it was a dramatic event at the mini budget. the uncertainty that this has created on the market but also the uncertainty created for businesses, individuals, workers, the self—employed, that is the nervousness in the economy. we reallyjust need a period of stability now. we have had the two big u—turns, the 45% while the other week ago and the corporation tax today and if i were the new chancellor, jeremy hunt, i think we would just need to back something on

the tory party need to get behind that in order to really stabilise the markets.— that in order to really stabilise the markets. , ., , the markets. there were statements from the prime _ the markets. there were statements from the prime minister, _ the markets. there were statements from the prime minister, and - the markets. there were statements from the prime minister, and she i the markets. there were statements| from the prime minister, and she was saying spending will grow less rapidly than previously planned and we will do whatever necessary to ensure debt is falling as a share of the economy in the medium term. are those sorts of general statements reassuring to the markets? it is just it isjust a it is just a the debt burden of the country is now bigger than the size of the whole economy. this has been going on since the massive package of support for covid—19 during the rushing —— rishi sunak era which was the right thing to do during those unprecedented times, but we haven't quite worked out as a government, as economy, has to pay back some of that debt burden. rishi sunak started thejourney that debt burden. rishi sunak started the journey with the 1.25% health and social care levy, the corporation tax increase, the measure to freeze allowances which has been a real anchor now on a lot of working families, because of the

effects of inflation —— inflation, but what has happened recently, is a huge reversal of those measures and now a backtrack on those reversals as well. so for me still lots of questions unanswered about how we're going to pay this debt back. there is a question we have had for over two years now. i do not think the markets have got those answers. goad markets have got those answers. good to talk to you — markets have got those answers. good to talk to you and _ markets have got those answers. good to talk to you and thank you for that instant assessment of the prime minister's statement. thank you for your time we minister's statement. thank you for yourtime we are minister's statement. thank you for your time we are going to get more from downing street as well, where it has been political developments. we go live now to my colleague. thanks very much indeed. welcome to downing street. kwasi kwarteng is out, as chancellor, jeremy hunt replaces him in the prime minister liz truss has reversed her cut in corporation tax. the mini budget cut that was followed by so much markets

turmoil. asked why she should stay, she said she was absolutely determined to see through what she promised. she said she would always act in the national interest and said her government would get through this storm. labour says the government is in meltdown. with me is if a key young, our deputy political editor. this is an extraordinary moment because the question for everyone in it downing street is whether the prime minister can survive and what the financial reaction is going to be. will it bring stability —— vicki young. the bring stability -- vicki young. the roblem bring stability -- vicki young. the problem she _ bring stability —— vicki young. the problem she has got is that kwasi kwarteng, how closest political ally. _ kwarteng, how closest political ally. it — kwarteng, how closest political ally, it was a joint endeavour, a joint _ ally, it was a joint endeavour, a joint programme, this mini budget was something they have been thinking — was something they have been thinking about and believed in for a lon- thinking about and believed in for a long time and they enacted it together. the general response from lots of _ together. the general response from lots of conservative mps together. the general response from lots of conservative mp5 is how can you sack _ lots of conservative mp5 is how can you sack your chancellor for incrementing the policy that you wanted? — incrementing the policy that you wanted? lots of them have been making _ wanted? lots of them have been making that point, saying she is the problem. _ making that point, saying she is the problem, not necessarily the

chancellor. bringing in a jeremy hunt _ chancellor. bringing in a jeremy hunt i _ chancellor. bringing in a jeremy hunt i think will help in terms of he is _ hunt i think will help in terms of he is not — hunt i think will help in terms of he is not someone who backed her in the leadership race, so it feels like she — the leadership race, so it feels like she has been a bit more inclusive. _ like she has been a bit more inclusive, that was lots of the problem _ inclusive, that was lots of the problem when she dropped her cabinet. — problem when she dropped her cabinet, she did not include anyone who did _ cabinet, she did not include anyone who did not — cabinet, she did not include anyone who did not back her, so maybe that is a sign _ who did not back her, so maybe that is a sign that— who did not back her, so maybe that is a sign that she is reaching out a bit more. — is a sign that she is reaching out a bit more, with lots of people talking, _ bit more, with lots of people talking, tory mps are saying it was humiliating for her to how to do this and — humiliating for her to how to do this and about the performance itself, — this and about the performance itself, any time in the markets and the country— itself, any time in the markets and the country need reassuring, they felt that— the country need reassuring, they felt that her performance was below par. felt that her performance was below par~ it _ felt that her performance was below par~ it is _ felt that her performance was below par. it is something much ruder than that, _ par. it is something much ruder than that, saying — par. it is something much ruder than that, saying it was very wooden, another— that, saying it was very wooden, another saying to us that they were watching _ another saying to us that they were watching it — another saying to us that they were watching it with their hands over their— watching it with their hands over their eyes — watching it with their hands over their eyes. the fact she didn't take many— their eyes. the fact she didn't take many questions, not a sign of confidence that she could not defend her position because she could not necessarily— her position because she could not necessarily defend why she has thrown — necessarily defend why she has thrown her chancellor and the bus, as someone — thrown her chancellor and the bus, as someone else put it, when she is still in _ as someone else put it, when she is still in place — as someone else put it, when she is still in place. the markets may be will be _ still in place. the markets may be will be slightly calmer, she has made _ will be slightly calmer, she has made a — will be slightly calmer, she has made a huge reversal there, a central— made a huge reversal there, a central plank of her approach —— approach. — central plank of her approach —— approach, she has ripped the heart out of— approach, she has ripped the heart out of her own budget so lots of

tory _ out of her own budget so lots of tory mps. — out of her own budget so lots of tory mps, many of them did not vote for her— tory mps, many of them did not vote for her in _ tory mps, many of them did not vote for her in the — tory mps, many of them did not vote for her in the first place, they will be — for her in the first place, they will be thinking, "what is the point of having _ will be thinking, "what is the point of having her?". people supporting her, of having her?". people supporting her. they— of having her?". people supporting her, they think she is under pressure. _ her, they think she is under pressure, they are worried, but if you backed — pressure, they are worried, but if you backed her and liked what she did in_ you backed her and liked what she did in the — you backed her and liked what she did in the budget, you are now also make _ did in the budget, you are now also make you _ did in the budget, you are now also make you are now also irritated because — make you are now also irritated because she has gone back on it. a because she has gone back on it. divided conservative party. the question is if they are likely to unite to get rid of her? could jeremy hunt end up being a success as a moderate unit, candidates who did not serve under borisjohnson, ran against him in the leadership? ran against him as well again but did not get very far? he ran against him as well again but did not get very far?— did not get very far? he is untainted, _ did not get very far? he is untainted, if _ did not get very far? he is untainted, if you - did not get very far? he is untainted, if you like, - did not get very far? he is l untainted, if you like, about did not get very far? he is - untainted, if you like, about the borisjohnson years, and he was not around in this cabinet either, he is very experienced, but there are some people have had sent that she has just anointed her successor, and there have been lots of chatting in there have been lots of chatting in the last couple of days that a unity government, unity within the conservative party, that is, and obviously the name of rishi sunak there, along with people like penny mordaunt, may be bringing in a

cabinet from all parts of the party. ijust cabinet from all parts of the party. i just do not cabinet from all parts of the party. ijust do not know if the conservative party is capable of doing that. there are so many factions, so much bitterness, but an awful lot of ex cabinet ministers, on the back benches and there are still some who have their own ideas... so some has to step aside, effectively, saying i will put my personal ambitions to one side and i'm not sure that all of them would do that. i think there are lots of tory mps that do not want liz truss there, they're not quite sure what they're going to do about it, so from that time, she can hang on, and what she has done today, a signal that she is willing to change to a certain extent, there is still now the 31st of october to come, but we get them at —— when we get the numbers... get them at -- when we get the numbers- - -_ get them at -- when we get the numbers... but is jeremy hunt in charae? numbers... but is jeremy hunt in charge? she _ numbers... but is jeremy hunt in charge? she can't _ numbers... but is jeremy hunt in charge? she can't say _ numbers... but is jeremy hunt in charge? she can't say no - numbers... but is jeremy hunt in charge? she can't say no to - numbers... but is jeremy hunt in charge? she can't say no to him. charge? she can't say no to him about anything? he does not have her economic outlook at all?— economic outlook at all? actually doinu economic outlook at all? actually doin: the economic outlook at all? actually doing the leadership _ economic outlook at all? actually doing the leadership contest, - economic outlook at all? actually doing the leadership contest, he | economic outlook at all? actually i doing the leadership contest, he did not want a massive cut in corporation tax, he wanted to put it

down to 15%. i assume he will not make that argument, he has obviously not made it right here, but we do not made it right here, but we do not know what the chats are that they have had, we do not know what they have had, we do not know what they have had, we do not know what they have agreed on, but she hasn't completely undermined, herself, her authority and her credibility are undermined, there is a massive problem when you are trying to lead a very fractious party, lots of them did not vote for her in the first place, where the power lies now, he knows? the cabinet, the new chancellor, and i think until maybe the 31st of october, we are not going to see what else is planned and whether they can carry on with this approach, which she of course has started. i think it is also her personal performance, there is not inspiring lots of her colleagues' confidence. we inspiring lots of her colleagues' confidence.— inspiring lots of her colleagues' confidence. s , , , ., confidence. we were 'ust seeing some ictures confidence. we were 'ust seeing some pictures then _ confidence. we were 'ust seeing some pictures then of — confidence. we were just seeing some pictures then of jeremy _ confidence. we were just seeing some pictures then ofjeremy hunt. - confidence. we were just seeing some pictures then ofjeremy hunt. he - confidence. we were just seeing some pictures then ofjeremy hunt. he is i pictures then ofjeremy hunt. he is very experienced, wasn't he? he was a former health secretary, he ran for leadership, he is seen as a moderate social minister, writes? he: was also the culture secretary in

the cabinet as well. probably best known for being the health secretary for all of those years. he had some certain controversy himself, the junior doctors, so not universally approve of —— approved of, but he stood against borisjohnson. i remember going to quite a few of those castings because everyone there thought they knew that boris johnson was going to win, and it was a sort of formality in a way, but lots of tories listening to him, these two come out and say, i am going to vote for boris as well, but jeremy was great, he is really impressive. obviously he didn't win, didn't get close, and in the last leadership race, he fell out quickly. lots of people felt his time had passed, the moment was back then, he did not make it against borisjohnson, he was unlucky then, but he is coming in now as chancellor.— but he is coming in now as chancellor. . ., ., . chancellor. he also had a cancer battle on a _ chancellor. he also had a cancer battle on a personal— chancellor. he also had a cancer battle on a personal friend. - chancellor. he also had a cancerj battle on a personal friend. yes, chancellor. he also had a cancer i battle on a personal friend. yes, he said it was — battle on a personal friend. yes, he said it was relatively _ battle on a personal friend. yes, he said it was relatively minor. -- - battle on a personal friend. yes, he said it was relatively minor. -- on i said it was relatively minor. -- on a personal— said it was relatively minor. -- on a personalfront. _

said it was relatively minor. -- on a personalfront. but— said it was relatively minor. -- on a personal front. but going - said it was relatively minor. -- on a personal front. but going from i said it was relatively minor. -- on| a personal front. but going from a -oacher a personal front. but going from a poacher to — a personal front. but going from a poacher to gamekeeper, - a personal front. but going from a poacher to gamekeeper, having i a personal front. but going from a i poacher to gamekeeper, having been the health secretary then quizzing health secretary is afterwards about what is going on at the department of health, that has given him a certain independence from the government, so i think that is helping him, he has not been as high profile in terms of being in the cabinet, but what we don't know is what he now thinks about what is going on what he now thinks is going to be the direction of the party and the direction of economic policy. but if he goes back to treasury orthodoxy, is that some might see it generally in terms of trying to bring some stability, as she has tried to change as well, if she now thinks, "in my own political survival, i'm going to totally switch and now move back into the centre of whether pari —— party might be," where the tories are, they may not want to hang on hard for their own sank the net sake. she

the mistress — for their own sank the net sake. she the mistress of— for their own sank the net sake. sue: the mistress of own invention. if she does that again, maybe by ripping up lots of this budget she is in some ways doing that. the problem she has then is that the tory party, the members, will say, "why do we vote for you? you did say you would do these things and then and now you are not doing them." then we have the parliamentary party asking what is the point of her? that she is just bringing asking what is the point of her? that she isjust bringing in asking what is the point of her? that she is just bringing in what rickett —— rishi sunak wanted to do but without the competence. rickett -- rishi sunak wanted to do but without the competence. however the new leader _ but without the competence. however the new leader is, _ but without the competence. however the new leader is, rishi _ but without the competence. however the new leader is, rishi sunak- but without the competence. however the new leader is, rishi sunak fell- the new leader is, rishi sunakfell out famously with boris johnson and his back benches... going to a new leader but going without to the country now?— leader but going without to the count now? . , , country now? technically, they can, the rules allow— country now? technically, they can, the rules allow it, _ country now? technically, they can, the rules allow it, i _ country now? technically, they can, the rules allow it, i have _ country now? technically, they can, the rules allow it, i have put - country now? technically, they can, the rules allow it, i have put that i the rules allow it, i have put that to lots of people, lots of conservative mps over the last few days, and said, you know, obviously, you would look ridiculous, the country would not wear it, but they said that they that —— they said that we look ridiculous anyway, that she has trashed their reputation,

and lots of them, those polls, lots of those mps think they just and lots of them, those polls, lots of those mps think theyjust have lost the next election already. and they are wondering about how much they are wondering about how much they will lose their seats. damage limitation, for example, bringing in somebody else to make the do not want a general election because of the pulse stand, a lot of them would lose their seat and they think they would be handing power to labour. —— as the polls stand. but would be handing power to labour. -- as the polls stand.— as the polls stand. but this is about daily — as the polls stand. but this is about daily decisions - as the polls stand. but this is about daily decisions that - as the polls stand. but this is i about daily decisions that affect everyone in this country, interest rates, mortgage prices, fuel prices, all of the tax prices that keep changing, how can anyone plan anything at the moment? there is a massive feel of total instability and insecurity on everyday decisions, that is why this matters. it matters particularly for the conservatives because one of the main thing is that they have beaten the labour party with at lots of general elections has been about economic competence, that if a labour minister comes in, it is going to be complete chaos. they would have put up taxes, spend loads of money and it would be chaotic.

people are going to look at that and say, hang on a minute, but may be lots of people are thinking oh, it can't be worsening at the moment. i think that is what the polls are reflecting. that is what is most upsetting the conservatives. they think the reputation for fiscal prudence, being the ones you can trust with the money, that that has gonein trust with the money, that that has gone in five weeks. lots of them think that they cannot get that back. that is partly whyjeremy had's been brought in because she obviously hopes, liz truss, that he can try and reassure people to say, look, we can do that, but where that leaves her, personally, is completely another matter and there are lots of mps who think she cannot survive this. we are lots of mps who think she cannot survive this-— survive this. we 'ust want to share some pictures — survive this. we just want to share some pictures that _ survive this. we just want to share some pictures that we _ survive this. we just want to share some pictures that we have - survive this. we just want to share some pictures that we have had ofj some pictures that we have had of kwasi kwarteng, the former chancellorjust kwasi kwarteng, the former chancellor just arriving kwasi kwarteng, the former chancellorjust arriving home at kwasi kwarteng, the former chancellor just arriving home at the moment. these pictures havejust come to us. he, of course, has had to fly back from the imf in the united states, i don't know if he is answering questions, does not look like it. famously, he is very close

politically and on a personal front to liz truss. i politically and on a personal front to liz truss-— to liz truss. i think that is the toint of to liz truss. i think that is the point of all — to liz truss. i think that is the point of all of _ to liz truss. i think that is the point of all of this, _ to liz truss. i think that is the point of all of this, that - to liz truss. i think that is the point of all of this, that is - to liz truss. i think that is the i point of all of this, that is what is coming through from tory mps here, that this is not her sacking a chancellor because they have gone rogue and done something they should not have done, she is a sacking somebody for influencing the policies that she wanted and that they believed in, so we're in a very bizarre situation, which is why lots of people think she does have any credibility because sacked somebody for implementing what she believed in. he looks cheerful there, but it must be emulating... but in. he looks cheerfulthere, but it must be emulating. . ._ in. he looks cheerfulthere, but it must be emulating... but the letters are contradictory, _ must be emulating... but the letters are contradictory, the _ must be emulating. .. but the letters are contradictory, the letter- must be emulating... but the letters are contradictory, the letter that - are contradictory, the letter that she sent to him, implies that he steps down, his letter implied that she asked him to leave... we steps down, his letter implied that she asked him to leave. . .- steps down, his letter implied that she asked him to leave... we do not really know. — she asked him to leave... we do not really know. they — she asked him to leave... we do not really know, they do _ she asked him to leave... we do not really know, they do sound - really know, they do sound contradictory, but we spoke to him yesterday in washington and he seemed to be very adamant that he was staying where he was and there was staying where he was and there was not going to be a u—turn and that he would still have the job. that changed overnight. sacking him might give hera that changed overnight. sacking him might give her a bit of time, but

actually, it leaves him more exposed in some ways as well. itz�*icki actually, it leaves him more exposed in some ways as well.— in some ways as well. vicki young, thank ou in some ways as well. vicki young, thank you very _ in some ways as well. vicki young, thank you very much. _ in some ways as well. vicki young, thank you very much. let's - in some ways as well. vicki young, thank you very much. let's have i in some ways as well. vicki young, thank you very much. let's have a | thank you very much. let's have a look at how the markets are reacting, it is a very key question. we'rejoined now by we're joined now by a representative from a jbl. please tell us what the market is at the moment. the stock market is at the moment. the stock market has — market is at the moment. the stock market has taken _ market is at the moment. the stock market has taken it _ market is at the moment. the stock market has taken it in _ market is at the moment. the stock market has taken it in its _ market is at the moment. the stock market has taken it in its stride, - market has taken it in its stride, using the ftse100 as a benchmark, lots of that is out to a follow—through from a very strong american stock markets, most importantly, the pound has lost a little bit of ground against the dollar and the euro, down to 1.15 euros and $1.12, and the gilt market which was initially strong this morning, with prices up and healed down, all of that ground this morning has been lost, so gilt yields and prices are broadly flat and i guess that probably reflects another chancellor of the exchequer gone, anyone coming in, now we had to check outjeremy hunt's

credentials, and see what he is going to do with the prime minister and hopefully the bank of england. 0f and hopefully the bank of england. of course today, was the deadline for the bank of england's policy. just explain what was happening on that front? i just explain what was happening on that front? .. just explain what was happening on that front? . ., , ., , that front? i have not seen anything on the i?tank — that front? i have not seen anything on the i?tank of _ that front? i have not seen anything on the bank of england _ that front? i have not seen anything on the bank of england buying - that front? i have not seen anything. on the bank of england buying today, but they're sticking to their guns at the moment, the end of that bond buying programme will be today, to help cool and calm down at the yields which has generally worked, the 30 year gilt yield which has been causing pension funds so much trouble, forcing them to sell to provide more cash and collateral to ensure its policies against gilt yield prices. that is lower than when the bank intervened, but it is still higher than it was before mr kwarteng stood up and gave his fiscal events just over a month ago. it is still a very uncertain time. the bank of england will be pleased with what it is seeing,, but is too early to be victorious, because if they stop the buying today, then from the 31st of october, it is in theory turning to sell gilts and

start winding down some £800 billion or more of quantitative easing it has done over the last decade and thatis has done over the last decade and that is a huge test for gilt yields, the bank of england is raising in —— interest rate, and the biggest single buyer of gilts for the last decade is turning its seller, logically you would see the gilt yields would rise from here, but the bank of england is maybe hoping they do so in an orderly fashion, rather than disorderly, like we have seen in the last two weeks. hose than disorderly, like we have seen in the last two weeks. how important is it for the markets _ in the last two weeks. how important is it for the markets to _ in the last two weeks. how important is it for the markets to hear - is it for the markets to hear quickly from the new chancellor? i’m quickly from the new chancellor? i'm sure the 'll quickly from the new chancellor? i“n sure they'll be looking to him for some sort of statement and some framework, but it is now all eyes on the 31st of october and halloween for the joint statement with the office for budget responsibility. i'm sure people will be hankering for quick action than that, but i think it is better to get a fully bank statement, rather than a half baked statement like we have been having recently. flan baked statement like we have been having recently.— having recently. can anyone really wait that long? _

having recently. can anyone really wait that long? people _ having recently. can anyone really wait that long? people have - having recently. can anyone really wait that long? people have been| wait that long? people have been asking if the premise that can last until next week at the moment. i know some lettuces don't even have that long of a shelf span! it is a helpful question, if mr hunt with liz truss and the bank of england, mr bailey will provide some framework, maybe we know some of the parts of the fiscal events are being kept, some are not, but i think ultimately, profit numbers would be much preferable to half baked ones, so if they can do them quicker, fantastic but if not, let's have some proper numbers, not made up ones which is what we have been treated to so far is. that is how the market use it.— treated to so far is. that is how the market use it. thank you very much indeed _ the market use it. thank you very much indeed for _ the market use it. thank you very much indeed forjoining _ the market use it. thank you very much indeed forjoining us. - the market use it. thank you very much indeed forjoining us. i'm i much indeed forjoining us. i'm joined now by matthew lesh head of the institute of public affairs who joins us now. what is your reaction to the fact that kwasi kwarteng has gone and jeremy hunt has been brought in by the prime minister could? this looks like a completely potential change of tack i think this is an extremely brutal and

shocking change, we should not forget the prime minister, former chancellor being extremely close friends and very much attached at the hip. for friends and very much attached at the hi ._ ., .., , the hip. for their careers in the last decade! — the hip. for their careers in the last decade! the _ the hip. for their careers in the last decade! the attempt - the hip. for their careers in the last decade! the attempt to i the hip. for their careers in the l last decade! the attempt to calm the hip. for their careers in the - last decade! the attempt to calm the markets, obviously, and the backbench, but risks further undermining her legitimacy. think getting rid of kwasi kwarteng is not going to solve the issues, but these may not even predate the current prime minister, having high levels of inflation, sediment growth, slow, and also now ensuring the fiscal numbers add up in that context as well as getting the economy back on for growth is extremely difficult to do, and requires a lot of very challenging political and policy work ahead. in challenging political and policy work ahead.— challenging political and policy work ahead. . ., , ., work ahead. in terms of where your think tank is. _ work ahead. in terms of where your think tank is, which _ work ahead. in terms of where your think tank is, which is _ work ahead. in terms of where your think tank is, which is a _ work ahead. in terms of where your think tank is, which is a place - think tank is, which is a place where a lot of with the thinking was

supposed to have come from, that was part of the conservative party position, if liz truss rows back from that position, the libertarian edition she seems to have held, is she going to lose support and if there is some sort of mishmash in her outlook? what is going to be the economic effect of that? there her outlook? what is going to be the economic effect of that?— economic effect of that? there is the frameworks _ economic effect of that? there is the frameworks that _ economic effect of that? there is the frameworks that have - economic effect of that? there is the frameworks that have been l the frameworks that have been supportive of these going for growth, getting down taxes and on top of that a need for regulatory reform. where trust struggles with spending restraint and the huge amounts of debt and borrowing associated with the energy price cap, as well as questions about her ability to do the regulatory reform, i think u—turns on this policy corporation tax today are quite disappointing. the uk will now end “p disappointing. the uk will now end up with a higher than average

corporate tax rate, substantially higher than our next—door neighbours, higherthan eu higher than our next—door neighbours, higher than eu 27, there is going to have a negative impact on investment and we are going to end up paying for that tax increase as workers, consumers, families. that is going to be bad news, and the government is going to do something else in terms of investment allowances and encouraging investment and corporation tax. more broadly speaking, i want to see what the government is able to do in terms of regulatory form, dealing with some issues in the system that are holding back infrastructure, solar panels, houses, fracking, all of these other growth for growth and development of the country needs. we have seen more in terms of business regulations and eu red tape. that is the agenda where we can see some medium and long—term growth and really square the circle when it comes to public spending and people's incomes, but that is extremely hard politically and needs to be done very delicately to get support and i hope it can be

achieved. it seems it is going to be achieved. it seems it is going to be a rocky road ahead.— a rocky road ahead. thank you, matthew lesh _ a rocky road ahead. thank you, matthew lesh for _ a rocky road ahead. thank you, matthew lesh forjoining - a rocky road ahead. thank you, matthew lesh forjoining us. i matthew lesh forjoining us. scotland 's first minister has given this reaction in the few minutes. i think the only decent thing that tory backbenchers could do now is call time on it liz truss and this entire uk government and allow people across the uk to have a general election. this is beyond a joke. it was neverfunny, but liz truss has already thrown her own decisions, crashed the economy and heaped misery on people who are already struggling with the cost of living crisis. today, she has forced her chancellor to carry the can for her chancellor to carry the can for her decisions, so she had already shown herself to be completely out of her depth as prime minister, as of her depth as prime minister, as of today, she is also a lean duck prime minister. the sooner she goes and the sooner people get the chance to get rid of this tory government is doing so much damage, once and

for all, the better. of course, the only way for scotland to permanently get rid of a tory government that we do not vote for is through independence.— do not vote for is through inde-endence. . i. , do not vote for is through inde-endence. .. ,~. , ., independence. have you spoken to the prime minister — independence. have you spoken to the prime minister in _ independence. have you spoken to the prime minister in last _ independence. have you spoken to the prime minister in last week _ independence. have you spoken to the prime minister in last week or- independence. have you spoken to the prime minister in last week or so? - prime minister in last week or so? no, liz truss has not phoned me, as a first minister of scotland, or even mark drakeford, as political payments, we should be working together, even so, we can, constructively, that is what i have done with liz truss's three predecessors in my time as first minister, so even in basic things, she has shown herself and fit to hold the office of prime minister. that would be one thing if that was a sort of political issue and all we were dealing with right now was political psychodrama. that is not a good thing, but it is made so much more serious right now that the price of liz truss's incompetence and ideological determination to drive through damaging policies, the price of that is being paid by people the length and breadth of the

uk. people are already struggling with the cost of living crisis, they are now also facing soaring mortgage rates, the cost of borrowing going up. it is incorrigible wasjust rates, the cost of borrowing going up. it is incorrigible was just what month in office liz truss has done to the living standards of people in the uk. it is time for her to go and it is time for this entire uk government to go and for people across the uk to get the opportunity to have their say in a general election. . . to have their say in a general election. , , , ., ., s, to have their say in a general election. , , , ., ., ., s, election. liz truss is adamant that she is going _ election. liz truss is adamant that she is going to _ election. liz truss is adamant that she is going to be _ election. liz truss is adamant that she is going to be staying - election. liz truss is adamant that she is going to be staying on. - election. liz truss is adamant that she is going to be staying on. thisj she is going to be staying on. this is a government you're going to have to work with. if you she were to pick up the phone tonight, what would your message to herbie? ” would your message to herbie? “ resign. close mici would your message to herbie? “ resign. close mic i am not the block to a constructive relationship. she is the fourth prime minister that has been in office since i have been first minister. deep political differences, obviously, with her three predecessors, but i have managed to work constructively to a greater or lesser extent with all of them. the fact that relationship not

even got past first base with liz truss is not down to me, frankly, know that down to mark drakeford in wales, it is down to liz truss being out of her depth and unfit to hold the office of prime minister. we saw borisjohnson being unfit for very boris johnson being unfit for very different borisjohnson being unfit for very different reasons, liz truss has not managed to even show a basic level of competence in the job and as i said a moment ago, if that was just an abstract problem, that would be one thing, but the price of that incompetence has been paid by people right now in the value of their mortgage repayments going up every month and the cost of living crisis that people have already been struggling with. this cannot go on. it is not sustainable in the sooner we see the back of liz truss and that entire tory government, the better for everybody.— better for everybody. nicola sturgeon — better for everybody. nicola sturgeon there _ better for everybody. nicola | sturgeon there because now better for everybody. nicola - sturgeon there because now for a general election. the shadow secretary of state for work and pensions, john ashworth gave elena's reaction. let pensions, john ashworth gave elena's reaction. . . pensions, john ashworth gave elena's reaction. , , . ., s,

reaction. let us be clear with what has 'ust reaction. let us be clear with what hasjust happened. _ reaction. let us be clear with what hasjust happened. liz _ reaction. let us be clear with what has just happened. liz truss - reaction. let us be clear with what hasjust happened. liz truss has l hasjust happened. liz truss has sacked _ hasjust happened. liz truss has sacked her— hasjust happened. liz truss has sacked her chancellor for carrying out the _ sacked her chancellor for carrying out the policies of liz truss. a set of policies — out the policies of liz truss. a set of policies that led to turmoil on the markets, which led to a run on pension— the markets, which led to a run on pension funds and soaring mortgage rates for— pension funds and soaring mortgage rates for home owners across the country. — rates for home owners across the country. on — rates for home owners across the country. on average, £500 more on a mortgage — country. on average, £500 more on a mortgage per month for many people. what is _ mortgage per month for many people. what is clear now is that we have a government— what is clear now is that we have a government in a meltdown, and the only party that can offer economic stability— only party that can offer economic stability and certain sustainably, and spread prosperity and wealth is the labour party. _ prosperity and wealth is the labour party. this— prosperity and wealth is the labour party. this is clearly a disastrous set of— party. this is clearly a disastrous set of decisions from a disastrous budget— set of decisions from a disastrous budget and actually, what we need is notjust_ budget and actually, what we need is notjust a _ budget and actually, what we need is notjust a change of budget and actually, what we need is not just a change of chancellor, budget and actually, what we need is notjust a change of chancellor, we need _ notjust a change of chancellor, we need a _ notjust a change of chancellor, we need a change of government. it was an absolutely disastrous budget and we were _ an absolutely disastrous budget and we were pressing how to reverse it,

but we _ we were pressing how to reverse it, but we have — we were pressing how to reverse it, but we have still got the problem that she — but we have still got the problem that she has no plan to grow our economy. — that she has no plan to grow our economy, no plan to fix our public finances. — economy, no plan to fix our public finances. no— economy, no plan to fix our public finances, no plan to rebuild our public— finances, no plan to rebuild our public services. homeowners are still facing — public services. homeowners are still facing an increase in their mortgages because of decisions that she took. _ mortgages because of decisions that she took. of course, getting rid of the chancellor is understandable under— the chancellor is understandable under the circumstances, but at the end of— under the circumstances, but at the end of the _ under the circumstances, but at the end of the day, people are still facing — end of the day, people are still facing increases in their mortgages because _ facing increases in their mortgages because of— facing increases in their mortgages because of liz truss. it is why we don't _ because of liz truss. it is why we don'tjust— because of liz truss. it is why we don'tjust need a change of chancellor, but also a change of approach — chancellor, but also a change of approach and government. john ashworth and _ approach and government. irvin ashworth and therefore the approach and government. jiff�*u�*u ashworth and therefore the labour party. in her letter to kwasi kwarteng, liz truss wrote, "i'm deeply sorry to lose you from the government, we set —— share the same vision for the country and the same firm conviction to go for growth. you have chancellor in extraordinarily challenging times in the face of severe global headwinds. thanks to your intervention, families will be able to heat their homes this winter, thousands ofjobs and livelihoods will be saved. you

have set in train a set of ambitious reforms that the government will proudly take forward" we bring you much more in the coming minute. stay with us, this is bbc news. we just wanted to say goodbye to our friends and viewers on bbc ones new. but let's catch up with the weather on bbc news. good afternoon. we have a real mix of with a typed out here today. some of us, some spells of blue sky and sunshine on offer. we also have some showery rain moving its way through and as we head to the next couple of days, things are going to turn a bit more unsettled. there will be some rain at times as we head into the weekend and in particular, they should be some dry and bright weather, particularly by the time we get to sunday. today, we have north pressure sitting up here, pushing at the weather fronts gradually south and east, bringing some spells of rain, we have some

fairly cloudy and true death rate drizzly weather this afternoon, and this line of showery rain across parts of northern england and wales. a return to sunny skies in the north, just a couple of showers this afternoon across parts of scotland and into north west england, temperatures here about 10—12 by 6pm, but 14—15 for most of us. tonight, clearskies 6pm, but 14—15 for most of us. tonight, clear skies and fairly chilly conditions, but then we see the wind picking up, the clouds moving across and some rain arriving for many of us to start off the saturday morning. it is going to be quite chilly when we look at minimum temperatures overnight, so a touch of frost in the north of its temperature is picking up through that morning is that wind and cloud arrival. tomorrow, a blustery day, some of blue sky around, parts of southern and eastern england, some showery rain moving in through the course of the afternoon. drying up partly in scotland before the summer more blustery showers arrived. winds of about 15 mph, but there will be

stronger gusts in the afternoon. top temperatures asim latif today, 16, 17 in the south and south—east, but furthermore, around 11, a bit cooler. moving through the weekend, saturday and sunday, low pressure is dominating, we see some range of higher pressure building into sunday, so some dry weather through the day on sunday, a bit less windy, but with low pressure close to scotland, still some blustery showers, easing later in the day before the next batch of heavy showers arrived in the south and south—west later on. gill is developing later on in the day, and ahead of that, reasonably light winds for most of us through the day on sunday, but certainly turning and settled into the evening and overnight. top which is still miles of the time of year, around 11—18.

those sorts of general statements reassuring to the markets?

this is bbc news. good afternoon. this is geeta guru—murthy at downing street. on the day liz truss says she is determined to remain as prime minister after she sucks her chancellor and announces a u—turn on corporation tax. chancellor and announces a u-turn on corporation tax— corporation tax. yarde i have decided to — corporation tax. yarde i have decided to keep _ corporation tax. yarde i have decided to keep the - corporation tax. yarde i have decided to keep the increase | corporation tax. yarde i have l decided to keep the increase in corporation tax announced by the previous government. this will raise £18 billion per year. kwasi kwarteng accepts the prime minister's request for him to step aside just weeks into the job — but says but says he still believes in her vision for the economy. he's replaced byjeremy hunt, the former health secretary. liz truss insists she's the right person to stay

in number ten, but labour say the government is in meltdown. this is a tory crisis, created in downing street but being paid for by ordinary working people. the prime minister has announced another u—turn on plans to cut corporation tax, after earlier sucking her chancellor kwasi kwarteng and replacing him with former health and foreign secretary jeremy hunt. liz truss insisted she would always act in the national interest and said that her government would get through this storm. asked whether she should resign, the prime minister said i am

absolutely determined to see through what i had promised. labour says the government is in meltdown. this is what the prime minister said in downing street. my conviction that this country needs to go for growth which is rooted in my personal experience. i know what it is like to grow up somewhere that is not 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. that's why, from day one, i've been ambitious for growth. since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth. i want to deliver a low tax, high wage, high growth economy. it's what i was elected by my party to do. that mission remains. people across this country

rightly want stability. that is why we acted to support businesses and households with their energy costs this winter. it's also the case that global economic conditions are worsening due to the continuation of putin's appalling war in ukraine. and on top of this, debt was amassed helping people through the covid pandemic. but it's clear that parts of our mini budget went further and faster than markets were expecting, 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. this will raise £18 billion per year. it will act as a down payment on ourfull, medium—term fiscal plan, which will be accompanied by

a forecast from the independent obr. we will do whatever is necessary to make sure that debt is falling as a share of the national economy in the medium term. we will control the size of the state to ensure that taxpayers money is always well spent. 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. i met the former chancellor earlier today. i was incredibly sorry to lose him. he is a great friend, and he shares my vision to set this country on the path to growth. today, i have asked jeremy hunt to become the new chancellor. he is one of the most experienced and widely respected government ministers and parliamentarians. and 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 that is protecting people from higher energy bills this winter. and he will drive our mission to go for growth, including taking forward the supply—side reforms that our country needs. we owe it to our next generation to improve our economic performance, to deliver higher wages, newjobs and better public services and to ease the burden of debt. i have acted decisively today, because my priority is ensuring our country's economic stability. as prime minister, i will always act in the national interest. this is always my first consideration. 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. i will now take questions. can i start with ben riley smith of the telegraph? clearly a difficult day. can you explain to the public why you think you should remain as prime minister whereas you have junked a key tax cut that led you to be elected and got rid of your chancellor? i am absolutely determined to see through what i have promised, to deliver a higher growth, more prosperous uk to see us through the storm we face. we have delivered the energy price guarantee making sure people are not facing huge bills this winter. it was right in the face of the issues that we had that i acted decisively to make sure

we have economic stability because that is vitally important to people and businesses across the country. erm... harry cole. you were the one that wanted to cut the 45p rate. you stood on a platform to win the leadership of the conservative party to cut corporation tax and you and the chancellor, the ex—chancellor, decided to come together in lockstep, we are told, at times in secret, the two of you. he has to go because of the fallout from it. how come you get to stay? my priority is making sure we deliver the economic stability our country needs. that is why i took the difficult decisions i have taken today. the mission remains the same. we need to raise our country's economic growth levels and deliver

for people across the country and we are committed to delivering on the energy price guarantee which people are already seeing in their bills. but ultimately, we also need to make sure we have economic stability and i have to act in the national interest as prime minister. erm... chris mason. excuse the bluntness, prime minister, but given everything that has happened, what credibility do you have to continue in government? what i have done today is made sure that we have economic stability in this country. jeremy hunt as chancellor is somebody who shares my desire for a high growth, low tax economy. we recognise because of current market issues that we have to deliver the mission

in a different way. that is what we are absolutely committed to doing, achieving that stability at what is a very difficult time, globally. erm... robert peston. prime minister, the former tory chancellor, philip hammond, has just said that you have totally trashed the tory party's election winning reputation for economic competence. will you apologise to your party? 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 double helping people through this winter and next winter with their energy bills, also making sure that our country is on the long—term footing for sustainable economic growth. thank you very much, everybody. jeremy hunt has just walked into downing street and not made any statement at all. we just came through the gates there. he has, of course, been appointed chancellor and vicki young is with me and there will be a lot of questions on what he will back for liz truss on whether he is in the driving seat. the issue is he has to present the medium term plan on the 31st of october, but she has ripped the heart out of the plan today by backtracking on the changes to

corporation tax, huge amount of money, £18 billion per year, she says that it would amount to and it's about credibility, authority and stability and that's why she brought him in because there are people in the party who think he is a senior in figure, respected, experience, that he is the person who can do it and crucially, he's not someone who backed her and is not someone who backed her and is not from her camp, unlike everyone else around the cabinet table, he will be the only one who did not backin will be the only one who did not back in the leadership contest, so she's reaching out, some would say belatedly, may be too late to try to bring the party together. what we don't know, and we do not know what they are talking about and their is how they will approach this. the fact that he _ how they will approach this. the fact that he has _ how they will approach this. the fact that he has agreed to go in does that suggest he has to be happy with some of the fundamental moves that they move forward on? love yes, or he's gone in there to dictate what they are or work alongside her to say what they will be. i think it helps in that sense, in the sense

that he is seen as a senior, experienced figure. whether it will be enough to protect her and getting a good chancellor and sucking your chancellor, that is a huge step afterjust chancellor, that is a huge step after just 38 days, chancellor, that is a huge step afterjust 38 days, and as lots of mps are saying to me and colleagues, sucking your chancellor for implementing your policy, that is the crucial thing. this was our policy as much as kwasi kwarteng and the only

policy as much as kwasi kwarteng and the o they really liked about her thing they really liked about her and the reason they backed out, she's gone back on that so that's a problem she is at risk of upsetting everybody, but they would say there's two years totally next election if they come in and tone it all down and row back. do you really think they can last for two years? it is. .. think they can last for two years? it is. ., ., , ., , , ., it is. there are lots of members of the nublic it is. there are lots of members of the public wondering _ it is. there are lots of members of the public wondering how - it is. there are lots of members of the public wondering how it - it is. there are lots of members of the public wondering how it can i the public wondering how it can happen that we have this leader we did not vote for, but those are the rules and that is the system and it's quite hard to get a general election when the governing party,

if the governing party don't want one and i can't imagine why tory mps would back a general election now. in that sense, she has got potentially sometime, unless there are senior member is of the party who go to her and say, look, it's finished or tory mps say we will not vote for anything you are telling us to vote for. i don't know. but i don't think there is the organised plot and i don't think tory mps know exactly what they will do about this. in exactly what they will do about this. . ., exactly what they will do about this. , ., ., . ., . , this. in terms of what the choices are now for _ this. in terms of what the choices are now forjeremy _ this. in terms of what the choices are now forjeremy hunt - this. in terms of what the choices are now forjeremy hunt and - this. in terms of what the choices are now forjeremy hunt and liz i are now forjeremy hunt and liz truss to be looking at, people will be looking at spending cuts, the tax situation. jeremy hunt wanted more cuts in corporation tax but it looks like that will rise as planned by rishi sunak. what are the parameters that they have to look at urgently and quickly now? the that they have to look at urgently and quickly now?— and quickly now? the big one is s-tendin and quickly now? the big one is spending cuts- _ and quickly now? the big one is spending cuts. you _ and quickly now? the big one is spending cuts. you know - and quickly now? the big one is spending cuts. you know that l and quickly now? the big one isj spending cuts. you know that in and quickly now? the big one is - spending cuts. you know that in the house of commons on wednesday liz truss said she would not do anything about spending, so the idea is that the spending review is in place and it stays the same but within that you can move money around a little

bit and there is a problem because inflation means in real terms a lot of departments will feel that there are cuts and we have to balance the books but there was a line about spending not going to rise as quickly as previously thought, so is that a hint that we are talking about spending cuts. that's a very difficult situation for a government at a time where there had been some paring back on public services. is it what voters want? are they in line with that? tory mp say i don't want it to be there sort of effect benefits or infrastructure in the north. liz benefits or infrastructure in the north. . . benefits or infrastructure in the north. , , ,., benefits or infrastructure in the north. ,, ., ., , north. liz truss said in the commons this week to — north. liz truss said in the commons this week to keir _ north. liz truss said in the commons this week to keir starmer _ north. liz truss said in the commons this week to keir starmer that - north. liz truss said in the commons this week to keir starmer that there | this week to keir starmer that there would not be public spending cuts. yes. but today she seemed, although it's not clear what she meant because she didn't take many questions, we don't know what she meant by that and we didn't get to it. there are a lot of questions and answers she needs to come up with. these are the questions tory mps are

asking, notjustjournalist. they don't know the direction it is going in and that is whyjeremy hunt is in there to sort it out. in and that is why jeremy hunt is in there to sort it out.— there to sort it out. thank you very much for now- _ there to sort it out. thank you very much for now. we _ there to sort it out. thank you very much for now. we want _ there to sort it out. thank you very much for now. we want to - there to sort it out. thank you very much for now. we want to show. there to sort it out. thank you very i much for now. we want to show you some of the latest pictures we have got of the chancellor, jeremy hunt a few moments ago leaving his house in london and arriving here behind us just in the last few moments, going into downing street, not taking any questions. the former foreign secretary and health secretary who has now agreed to step into the role as chancellor. let's hear from rachel reeves, who is saying that ordinary people are having to pay the price for their mismanagement. this is a tory crisis, created in downing street but being paid for by ordinary working people. and so much damage has already been

done with families paying a higher mortgage rates and worrying about their pensions. it's notjust time for a not a conservative chancellor, it's time for a labour government because only labour have the plans to grow our economy and provide the economic stability that the country desperately needs with the recognition that wealth does not just come from the top down but is created by ordinary working people across our country. liz created by ordinary working people across our country.— across our country. liz truss is sa int across our country. liz truss is saying the _ across our country. liz truss is saying the decision _ across our country. liz truss is saying the decision sees - across our country. liz truss is saying the decision sees been | across our country. liz truss is - saying the decision sees been making today that she will help bring the stability of the country needs but you don't believe that. so stability of the country needs but you don't believe that.— you don't believe that. so much damate you don't believe that. so much damage has _ you don't believe that. so much damage has already _ you don't believe that. so much damage has already been - you don't believe that. so much damage has already been done | you don't believe that. so much - damage has already been done and people are having sleepless nights because of the mortgage rates they are paying and also worrying about what is happening to their pensions. the partial u—turn today does not reverse the whole budget, which is what is needed. a government need to go back to the drawing board, not picking out individual measures. we need a budget that adds up with an

independent forecast from the obr. but the truth is, the trickle—down tired economics of the conservatives no longer works and it is time for a labour government that prioritises ordinary working people, not this belief that somehow tax cuts for the richest will somehow filter down to everyone else. liz richest will somehow filter down to everyone else-— everyone else. liz truss has taken action and — everyone else. liz truss has taken action and got _ everyone else. liz truss has taken action and got rid _ everyone else. liz truss has taken action and got rid of— everyone else. liz truss has taken action and got rid of her— everyone else. liz truss has taken | action and got rid of her chancellor and the shortest term of the chancellor in history. does it make a difference? igrate chancellor in history. does it make a difference?— a difference? we are now on the fourth conservative _ a difference? we are now on the fourth conservative chancellor . a difference? we are now on the l fourth conservative chancellor this year, and the fourth sincejuly this year, and the fourth sincejuly this year, but the truth is another change in who is running the treasury, another tory chancellor is not the answer to the challenges we face as a country. the tories are out of ideas and out of time and it's time for a labour government. of it's time for a labour government. of course labour want a general election, but that's not going to happen. no government would consider calling a general election the position of the conservatives are,

it's not reality. it’s position of the conservatives are, it's not reality-— it's not reality. it's time for the prime minister _ it's not reality. it's time for the prime minister to _ it's not reality. it's time for the prime minister to put - it's not reality. it's time for the prime minister to put the - it's not reality. it's time for the l prime minister to put the country first and at the very least she should go back to the drawing board with her budget that was devised in lockstep chancellor of the exchequer. producing an independent forecast. and get rid of a whole range of tax cuts introduced the instability in financial markets with real costs for working people and higher mortgage rates and fears about pensions. iltrui’hat and higher mortgage rates and fears about pensions.— about pensions. what would you do different if rachel _ about pensions. what would you do different if rachel reeves - about pensions. what would you do different if rachel reeves was - about pensions. what would you do | different if rachel reeves was made chancellor instead ofjeremy hunt? we need to respect economic institutions. the undermining of the permanent secretary at the gagging of the obr have added to the volatility in financial markets along with the scale of the unfunded tax cuts. labour would always put fiscal responsibility and economic credibility first, because we know

thatis credibility first, because we know that is so important for family finances. and labour's plans for growth, investing in the industries of the future with green prosperity plans, reforming business rates to help high streets and small businesses, making britain the best place to start and grow a business, thatis place to start and grow a business, that is at the heart of labour's plans for economic growth and stability, a world apart from the trickle—down economics we see from liz truss and her conservative government. liz liz truss and her conservative government-— government. liz truss i kwasi kwarteng _ government. liz truss i kwasi kwarteng did _ government. liz truss i kwasi kwarteng did push _ government. liz truss i kwasi kwarteng did push forward i government. liz truss i kwasi i kwarteng did push forward with government. liz truss i kwasi - kwarteng did push forward with the same policies and now she say it is more his than hers but she has now jeremy hunt he sided with rishi sunak. does it show at least she is beginning to show signs of being prepared to listen to other voices? well, 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 a failed trickle—down economics we have seen from the

conservatives in recent weeks is for the birds. jeremy hunt, like kwasi kwarteng and liz truss, signs up to this trickle—down model of economics which has failed our country and has resulted in the instability and insecurity and volatility we have seenin insecurity and volatility we have seen in the last three weeks since the former chancellor's mini budget. of the former chancellor's mini budget. of course the conservatives are at a low point and weak point at the moment but in all honesty, would labour want to take power? there are so many external factors and actors causing economic turmoil. labour would be taking charge of such an unstable ship. the would be taking charge of such an unstable ship.— would be taking charge of such an unstable ship. the truth is that the uk is the only _ unstable ship. the truth is that the uk is the only country _ unstable ship. the truth is that the uk is the only country in _ unstable ship. the truth is that the uk is the only country in the - unstable ship. the truth is that the uk is the only country in the world | uk is the only country in the world where our central bank has an to intervene three times in less than three weeks to protect uk financial stability. a change of government, and a labour government, is exactly what is needed to provide the economic stability that investors and families need and we are ready to provide that leadership.-

to provide that leadership. rachel reeves, to provide that leadership. rachel reeves. the _ to provide that leadership. rachel reeves, the shadow _ to provide that leadership. rachel reeves, the shadow chancellor. i the only thing tory backbenchers can do now is called time on liz truss on this tory government and allow people across the uk to have a general election. this is beyond a joke. it was neverfunny, 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. now today she has forced her chancellor to carry the can for her decisions, so she has already shown herself to be completely out of her depth as prime minister, and as of today she is a lame duck prime minister. the sooner she goes on 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. the only way for scotland to permanently get rid of tory governments we don't vote for is

through independence. haste governments we don't vote for is through independence.— through independence. have you s-oken to through independence. have you spoken to the — through independence. have you spoken to the prime _ through independence. have you spoken to the prime minister - through independence. have you spoken to the prime minister in i through independence. have you i spoken to the prime minister in the last week or so customer no. liz truss has _ last week or so customer no. l z truss has not phoned me as first minister of scotland or mark drakeford as first minister of wales, so even on these basic courtesies of government, we are political opponents but we should be working together where we can constructively. that's what i've done with liz truss's three predecessors in my time as first minister, so even in these basic things she has shown herself unfit to hold the office of prime minister. that would be one thing if that was just a political issue and all we were dealing with was political psychodrama. that's not a good thing, but it is made so much more serious right now that the price of liz truss's incompetence and ideological determination to drive through damaging policies, the price of that is being paid by people the length and breadth of the uk. people who were already struggling with a cost of living crisis are now facing soaring

mortgage rates on the cost of borrowing going up. it is unconscionable what in just a month orso unconscionable what in just a month or so in office liz truss has done to the uk economy and to the living standards are people in every part of the uk. it is time for her to go. it is time for this entire uk government to go and for people across the uk to get the opportunity to have their say in a general election. . . to have their say in a general election. , , , ., ., s, to have their say in a general election. , , , ., ., ., , election. liz truss is adamant she will be staying _ election. liz truss is adamant she will be staying on. _ election. liz truss is adamant she will be staying on. this _ election. liz truss is adamant she will be staying on. this is - election. liz truss is adamant she will be staying on. this is a - will be staying on. this is a government you are going to have to work with. if she were to pick up the phone to you tonight, what would your message be?— your message be? resign. beyond that, i am your message be? resign. beyond that. i am not— your message be? resign. beyond that, i am not the _ your message be? resign. beyond that, i am not the block— your message be? resign. beyond that, i am not the block to - your message be? resign. beyond that, i am not the block to a - that, i am not the block to a constructive relationship with the uk government. liz truss is the fourth prime minister that has been in office since i have been first minister. i've had deep political differences, obviously, with her three predecessors but i've managed to work constructively to a greater or lesser extent with all of them, and the fact that that relationship hasn't even got past first base with liz truss is not down to me, frankly, nor is it down to mark

drakeford in wales, it is down to liz truss being out of her depth and unfit to hold the office of prime minister. we saw borisjohnson being unfit for very different reasons, but liz truss hasn't even shown a basic level of competence in the job. as i said a moment ago, if that was an abstract problem, that would be one thing, but the price of that incompetence is being paid by people right now in the value of their mortgage repayments going up every month and the cost of living crisis that people are already struggling with. this can't go on. it's not sustainable, and the sooner we see the back of liz truss and that entire tory government, the better for everybody. i'm joined by our economic correspondent. give us a sense of the market reaction to the prime minster�*s statement a short time ago? ii minster's statement a short time a t o? minster's statement a short time ato? ~ . minster's statement a short time ato? ~ , ., , ago? if the prime minister was hotint ago? if the prime minister was hoping that — ago? if the prime minister was hoping that by _ ago? if the prime minister was hoping that by sacrificing - ago? if the prime minister was hoping that by sacrificing her l hoping that by sacrificing her chancellor and a key plank of her

economic plans that the market might relax and say this is all ok, she was wrong. what we are looking at right now is the bond market in particular, which looks at the way the government borrows, the interest rates and cost of borrowing that those implying are actually higher than they were at the start of the day, and they remain considerably higher than they were prior to the so—called mini budget and that means higher mortgage bills and borrowing costs for businesses and households across the country who are taking out new loans. why have the markets reacted this way? it's down to credibility, not so much about the person delivering the tax and spend plans that they are worried about, it's about whether or not the policies add up, and what we saw in the eight minute statement from the prime minister did not answer key questions as far as they are concerned. they are still thinking about how the plans will be funded, because they have £25 billion of tax changes out there. on top of that,

we have a cost of the energy support package and we also have the prime minister pledging that debt is going to come down in a few years, but we are not sure how. and there is the big question overgrowth, because she said lower tax rates were needed to deliver growth and economists queried that but now they say when you look at the higher borrowing costs and the fact that companies up and down the countries and around the uk are saying all of the instability makes us reluctant to invest and borrowing costs are higher, what does it mean for the economy? some out there are still talking about the uk going into recession next year with all eyes on the 31st of october we were meant to hear more of the economic plan and what the economic watchdog thinks of it. is what the economic watchdog thinks of it. , , , ., ., , what the economic watchdog thinks of it., , ., what the economic watchdog thinks of it. is it sustainable to wait until the 31st. there _ it. is it sustainable to wait until the 31st. there will _ it. is it sustainable to wait until the 31st. there will be - it. is it sustainable to wait until the 31st. there will be a - it. is it sustainable to wait until. the 31st. there will be a clamour for the new chancellor to flesh out his thinking earlier than that. there will indeed and it has felt like a year but it's only been three weeks since the so—called mini budget and so much has changed from

the initial date and we have seen the initial date and we have seen the government pledged things, and they go back on the pledges and they were practically dizzy and feeling the whiplash from the movements in policy. the markets are feeling the same. we always say markets don't like uncertainty but they also don't like uncertainty but they also don't like instability. but they will want to see concrete news about what it means, and can the government ride it out for a further, what, two weeks, are we? that's a long time considering what we have seen stop never say never. we might have to see things come forward and some pretty drastic changes compared to what they are currently expecting, but as we sit here right now, this has done very little to alleviate those concerns we have seen, not just on bond markets, but currency markets as well and never before have they seen a chancellor do a midnight flit from imf meetings in washington. that in itself has caused quite a reaction amongst those policy makers around the world

who have been watching the uk closely. who have been watching the uk closel . ~ ,~. , , ., ,, ., who have been watching the uk closel. ,, closely. when you speak to people, what is it that — closely. when you speak to people, what is it that they _ closely. when you speak to people, what is it that they want _ closely. when you speak to people, what is it that they want to - closely. when you speak to people, what is it that they want to hear? i what is it that they want to hear? what are they saying to you that they need the government to come out and tell them? they need to have reassurance on those key points they need to have reassurance on those key points because they need to have reassurance on those key points because we they need to have reassurance on those key points because we talk about economic gullibility and we see how easily it can be lost in recent weeks, they know, they want to know, if we talk about growth, this has been that has eluded chancellors for many years now. particularly for the financial crisis, to get to the growth levels that liz truss wanted to see. they have not seen that the entire plan, they are not convinced that what is on the table already is going to deliver that, and they are also not sure how on earth she is going to get the debt down, because don't forget, we talk about the reaction, public reaction, lots of this is about the uk's credibility, how is it for investors? if the government is seen as at risk of overstretching itself, that is where the investors get worried. when there is a risk of inflation are getting higher, that is where investors get worried. the plans currently on the table to

point to that.— plans currently on the table to point to that. plans currently on the table to toint to that. . , , ., , point to that. finally, everyone is inkint point to that. finally, everyone is inking about _ point to that. finally, everyone is inking about their _ point to that. finally, everyone is inking about their own _ point to that. finally, everyone is inking about their own finances, i inking about their own finances, interest rates, mortgages for those who are homeowners. is it possible at this stage to say, how individuals are going to be affected by this or are we going to have to wait and see what the government announces and then see the market reaction? itide announces and then see the market reaction? ~ ., announces and then see the market reaction? t ., ., ., ., reaction? we will have to wait and see it as it — reaction? we will have to wait and see it as it stands _ reaction? we will have to wait and see it as it stands right _ reaction? we will have to wait and see it as it stands right now, - reaction? we will have to wait and see it as it stands right now, we i see it as it stands right now, we look at what has happened just the last 24 hours, because there are rumours and reports that we were going to see this u—turn on the corporation tax change, and once those rumours and reports are filtering out —— filtering out, we have started to see some movement in those bond markets, a little bit of a reduction in the cost of borrowing that those implied and also for expectations of how the bank of england might have to increase their base rate cut next year, there has been a little bit of a relief there, but quite frankly, if you are looking right now to take a new fixed rate mortgage in the uk, two—year, five year, looking at the kind of rates that we have not seen

since the financial crisis. we are looking at rates that are more than twice as high, interest rates, then they were at the end of last year. so for the 2 million or so households that are set to remortgage in the next year or two, that could hurt.— remortgage in the next year or two, that could hurt. thank you very much for now. that could hurt. thank you very much for now- i'm — that could hurt. thank you very much for now. i'm joined _ that could hurt. thank you very much for now. i'm joined by _ that could hurt. thank you very much for now. i'm joined by a _ that could hurt. thank you very much for now. i'm joined by a former - that could hurt. thank you very much for now. i'm joined by a former bank| for now. i'm joined by a former bank of england economist and now senior economist at the ipp r centre for economicjustice. thank you very much forjoining us. we have now got a new chancellor, jeremy hunt, we do not know what kind of plan he is going to implement. —— ippr. what is yoursense going to implement. —— ippr. what is your sense of where we are and whether there is enough potentially there to bring some financial stability? it there to bring some financial stabili ? .. . there to bring some financial stabili ? . , . s, , there to bring some financial stabili ? . ., , stability? it was certainly good that liz truss _ stability? it was certainly good that liz truss now _ stability? it was certainly good that liz truss now sees - stability? it was certainly good that liz truss now sees that i stability? it was certainly good i that liz truss now sees that her plan was irresponsible in the markets that were not happy with it, but really, it is just a partial

u—turn. she is still embarking on a strategy to what is effectively defunding public services. half of her tax cuts, 25 billion are still in place and this is funding that our public services need in this cost of living crisis, where we need to support people, and it looks like jeremy hunt is not going to reverse that either, so i fear that unless we have the full u—turn and a full commitment to properly fund our public services and possibly through tax increases such as a windfall tax on energy profits, if we do not have that commitment, and then there will remain instability and people's livelihoods will be addressed. —— addressed. she livelihoods will be addressed. -- addressed-— addressed. she has changed her toli on addressed. she has changed her policy on corporation _ addressed. she has changed her policy on corporation tax, - addressed. she has changed her policy on corporation tax, which | policy on corporation tax, which will see that small businesses see

their incomes fall, having seen a number of changes in recent weeks. what is most important for businesses, small or big businesses, speaking to them about the economy, what they need is stability and a clear plan for supporting households in the cost of living crisis, more support will be needed on those fronts. good public services which are important for a healthy work, you know, the nhs is in dire need of funding, those public services, insert —— income support, that keep the economy afloat, cutting corporation tax are a drop in the ocean compared to an economy that is in disarray. a commitment to public services and instability of strategy, that is what businesses

want and not the kind of disarray we have at the moment. is it want and not the kind of disarray we have at the moment.— have at the moment. is it possible for liz have at the moment. is it possible for liz truss _ have at the moment. is it possible for liz truss to _ have at the moment. is it possible for liz truss to keep _ have at the moment. is it possible for liz truss to keep some - have at the moment. is it possible for liz truss to keep some of - have at the moment. is it possible for liz truss to keep some of her i for liz truss to keep some of her initial pledges and still bring some stability? still protect the public services? she said in the house of commons this week that she was not going to bring in public spending cuts. inflation has already eroded the numbers. cuts. inflation has already eroded the numbers-— cuts. inflation has already eroded the numbers. even before liz truss came to power. _ the numbers. even before liz truss came to power, we _ the numbers. even before liz truss came to power, we were _ the numbers. even before liz truss came to power, we were not - exactly in a rosy place. we had the cost of living crisis ravaging livelihoods and an incredibly long waiting time for most in the nhs, and with her strategy, she has gone the opposite way from fixing them, so if she keeps some of these tax cuts, there will still be nothing... it will be done on it, say, insulates the homes across the country to wean ourselves off the

incredibly expensive gas and advanced the green transition and give us cheap energy, nothing will be done on this, likewise, waiting times of the nhs will be long. the nhs is struggling to attract workers at the moment, because real wages are still lower now, in the public centre than they were 50 years ago, so really, we need to invest in public services to fix problems like this. she keeps insisting on her strategy, and if so, those things won't be fixed, if she keeps insisting. only a further reversal will help, i think. it insisting. only a further reversal will help, ithink.— will help, i think. if she moves into the position _ will help, i think. if she moves into the position that - will help, i think. if she moves into the position that rishi - will help, i think. if she moves. into the position that rishi sunak was in, will markets regard that as possible, as a credible? —— plausible? possible, as a credible? -- plausible?— possible, as a credible? -- latusible? , ,, ., ., , plausible? rishi sunak certainly did not embark on _ plausible? rishi sunak certainly did not embark on a _

plausible? rishi sunak certainly did not embark on a strategy, - plausible? rishi sunak certainly did not embark on a strategy, pulling l not embark on a strategy, pulling the rug from, in terms of funding, from the public services, so think markets will see this as an assurance if she endorses his strategy. but also, his answer is, at least in what he said in his leadership race, were not bold enough on some issues, such as insulating homes. we have a hugely inadequate support scheme for helping people insulate homes, install electricity, heating, that can be clean, so i don't think he has all the answers either, but it would at least reverse some of those damaging tax cuts, probably. ok. damaging tax cuts, probably. ok, thank you. _ damaging tax cuts, probably. ok, thank you. we _ damaging tax cuts, probably. ok, thank you, we will— damaging tax cuts, probably. 0k, thank you, we will have to leave it there. thank you forjoining us. i'm joined now by the former conservative mp for bath, ben howlett who was previously a supporter ofjeremy hunt's bid to

become prime minister over boris johnson back in 2019. thank you very much forjoining us. are you surprised thatjeremy hunt has agreed to come in and try to shore up agreed to come in and try to shore up liz truss? is he going to agree to any of the plant in her mini budget or is he going to want a complete reversal? in budget or is he going to want a complete reversal?— complete reversal? in terms of jeremy hunt. _ complete reversal? in terms of jeremy hunt. he _ complete reversal? in terms of jeremy hunt, he is _ complete reversal? in terms of jeremy hunt, he is one - complete reversal? in terms of jeremy hunt, he is one of - complete reversal? in terms of jeremy hunt, he is one of the i complete reversal? in terms of- jeremy hunt, he is one of the most shrewd politicians i have ever had the luxury of working with come over the luxury of working with come over the years. he is well respected, as you will have seen from different comments coming in the backbench conservative mps. i think universally, they have come out and supported it, because he is dedicated, hard—working, and he would look into the detail. i think thatis would look into the detail. i think that is very much a contrast to his predecessor. i expect what he will do over the next couple of weeks will really get into the detail of what needs to be done ahead of the statement. he may take his own course, and i hope that liz truss takes a total cabinet decision over what is going to be put into the statement in two weeks' time. he

will also listen to officials, unlike his predecessor. he will also listen to officials, unlike his predecessor. he did want a bitter unlike his predecessor. he did want a bigger cut — unlike his predecessor. he did want a bigger cut in _ unlike his predecessor. he did want a bigger cut in corporation - unlike his predecessor. he did want a bigger cut in corporation tax - unlike his predecessor. he did want a bigger cut in corporation tax is? l a bigger cut in corporation tax is? this is a long time in politics for 48 hours, as we have seen, but in terms of his own perspective, he has been very clear over the years that he will end up tagging on with collecting ministerial is a possibility i suspect the cabinet will come up with a collective decision in terms of where they go. on corporation tax in contrast to your previous interviewer, i do own a small business and i do want certainty and i do want to see a chancellor come out with a very reassuring business, i want to know how the people i can employ if they can put food on their table every week i have to run the payroll on a monthly basis it is a concerning time as well. what has happened over the last couple of weeks with liz truss's shredding of economic

competency from the conservative's perspective is an absolute shambles and whetherjeremy hunt is able to pick up the pieces, it won't look bad on him, it will reflectively look bad ultimately on the prime minister because they were her policies that were universally dismissed. here we go, i told you so, is a long phrase in politics. there is a lot of speculation about whether liz truss has effectively anointed her successor injeremy anointed her successor in jeremy hunt. t ., anointed her successor in jeremy hunt. ~ .. s .. . anointed her successor in jeremy hunt. t ., ~ ., , , , hunt. who knows he will end up being the success- — hunt. who knows he will end up being the success- i — hunt. who knows he will end up being the success. i think— hunt. who knows he will end up being the success. i think probably - hunt. who knows he will end up being the success. i think probably events i the success. i think probably events will end up taking a toll over the weekend and movements will happen very early next week. that has been the conversation that i have heard from members of my previous colleagues. on the future of liz truss, what she has to do is set out

a store which ultimately listens to treasury officials, to people that she has ultimately ignored over the last couple of weeks, and come together with her cabinet who will give her a pretty good advice and decide what the future is. if she does not listen, it is over. i do not know whether it is enough in order to save her bacon, but as it stands, it looks like there is only going to be one conservative mp is a general election happens tomorrow and he ironically is the chair of the palm entry group for funerals. —— parliamentary group. it looks like they may move to remove the prime minister next week and we will see an interim caretaker government which will end up lasting the course of the remainder of this parliament. if they can turn that around, it is a massive uphill battle. you think she's going _ a massive uphill battle. you think she's going be — a massive uphill battle. you think she's going be toppled? - a massive uphill battle. you thinkj she's going be toppled? speaking a massive uphill battle. you think. she's going be toppled? speaking to serious mps in _ she's going be toppled? speaking to serious mps in the _ she's going be toppled? speaking to serious mps in the back— she's going be toppled? speaking to serious mps in the back benches - she's going be toppled? speaking to j serious mps in the back benches and also in a government, some as well, by the way, some movements may also be under way in order to make that

happen. they will probably need to be a rule change that will happen under way, with a 1922 committee, next week, but whether or not the next week, but whether or not the next week, but whether or not the next week new chancellor appointment is going to save her, i'm doubtful. at the end of the day, it was not the previous chancellor's policies, it was her policies that she has just quite frankly remove hair transplant, and the policy is still roughly in a place, there is a significant black hole in the public spending which will end up needing to be filled. it is notjust about the policies, frankly, does not have as well. she just is not that publicly popular. i do not think that will change between now and the next general election. flan that will change between now and the next general election.— next general election. can you 'ust tell us next general election. can you 'ust teu us what — next general election. can you 'ust tell us what you - next general election. can you 'ust tell us what you are - next general election. can you 'ust tell us what you are hearing . next general election. can you just tell us what you are hearing with i tell us what you are hearing with the numbers from what you are hearing and the rule changes that need to happen with the 1922? standing with a 1922 is that she has got a year's worth of grace period, so there would have to change. in terms of conversations that have been happening in various different whatsapped groups and on a different

phone calls is that they do not feel that the change in direction with a new chancellor is enough in order for them to stop moving early next week. .. . for them to stop moving early next week. . , ., ., , ., for them to stop moving early next week. . , , ., ., , week. i have been in rooms on many occasions over _ week. i have been in rooms on many occasions over the _ week. i have been in rooms on many occasions over the last _ week. i have been in rooms on many occasions over the last few _ week. i have been in rooms on manyl occasions over the last few moments, before —— last few years, before politicians politics —— bottle it, as to making a decision in toppling the prime minister, but i think it is pretty likely that she is not going to see guy fox night at this rate. who are the names around which people cannot rally? jeremy hunt? rishi sunak and penny mordaunt? he was someone who also has not had any of the big jobs in government, penny mordaunt? i of the big jobs in government, penny mordaunt? .. . .. of the big jobs in government, penny mordaunt? . , . , mordaunt? i was at the party conference — mordaunt? i was at the party conference only _ mordaunt? i was at the party conference only a _ mordaunt? i was at the party conference only a matter- mordaunt? i was at the party conference only a matter of. mordaunt? i was at the party - conference only a matter of days ago. it feels like a lifetime ago. penny mordaunt was having people that were going around rooms screaming her name, having autographs and all of the rest. now i can promise you that liz truss was

not having that and certainly kwasi kwarteng certainly was not either. jeremy hunt is highly well—respected, but as we saw from the last leadership election, it did not go his way, so i suspect that there will be some sort of caretaker environments going on. i have been around the conservative party around 15 years now. i remember the time when iain duncan smith was trying to turn up the volume. an awful lot of parallels to this moment, by the way! there was a michael howard a figure that came forward, perhaps thatis figure that came forward, perhaps that is an option. i don't know. in reality, i we do not see... —— i really do not see? reality, i we do not see... -- i really do not see?— reality, i we do not see... -- i really do not see? who are the key names that — really do not see? who are the key names that are _ really do not see? who are the key names that are being _ really do not see? who are the key names that are being rallied - names that are being rallied around, does it feel plausible or does it feel democratic for the conservatives to do that without the public ask of what they want and what they want? to public ask of what they want and what they want?— public ask of what they want and what they want? to an extent, and i do think that — what they want? to an extent, and i do think that this _ what they want? to an extent, and i do think that this is _ what they want? to an extent, and i do think that this is the _ what they want? to an extent, and i do think that this is the first - what they want? to an extent, and i do think that this is the first time i do think that this is the first time i have ever said this, i do agree with needing diaries on this committee is going to be hard for

any new prime minister, if liz does that if liz truss does topple, to go ahead of the public, gordon brown found it difficult, so whoever may potentially take over from a liz truss will face those questions over and over again. there are some high quality cabinet ministers in government at the moment. you have named a few of them already, but i think at this moment in time, there will be doubt of it being a fresh face, i doubt, someone who will want to friis —— spruce things up a bit, i think it would be someone who is a trusted pair of hands, a apparel detail —— is trusted on the detail, and after the borisjohnson and after the boris johnson government... and after the boris johnson government. . ._ and after the boris johnson tovernment... t ., ., , government... who that person? -- ou is government... who that person? -- you is that — government... who that person? -- you is that person? _ government. .. who that person? -- you is that person? i _ government... who that person? -- you is that person? i do _ government... who that person? -- you is that person? i do not - government... who that person? -- you is that person? i do not know i you is that person? i do not know and it would _ you is that person? i do not know and it would be _ you is that person? i do not know and it would be unfair— you is that person? i do not know and it would be unfair of- you is that person? i do not know and it would be unfair of me - you is that person? i do not know and it would be unfair of me to i you is that person? i do not know i and it would be unfair of me to say, but there are some good cabinet ministers there, it is up to them whether they move or not. the luxury and of no longer being in parliament is that i do not have to pick a

side. �* , ,., , is that i do not have to pick a side. �* , , ., ,, is that i do not have to pick a side. n, , ., is that i do not have to pick a side. �* , . ~' ., side. absolutely! thank you for shafint side. absolutely! thank you for sharing your — side. absolutely! thank you for sharing your thoughts - side. absolutely! thank you for sharing your thoughts with - side. absolutely! thank you for sharing your thoughts with us. | side. absolutely! thank you for . sharing your thoughts with us. the transport secretary has been speaking to our politics north team and she was asked if she would apologise for the economic turmoil. this is what she said. i do not think she _ this is what she said. i do not think she has. _ this is what she said. i do not think she has. she _ this is what she said. i do not think she has. she is - this is what she said. i do not i think she has. she is delivering, this is what she said. i do not. think she has. she is delivering, i think, a broad programme, doing all of the tax changes at the same time, too much for the market to 16 in the short term, because there are so many global disruptions across... we are seeing every countries with inflationary rises, this is a global challenge which we all have to tackle. �* . .. challenge which we all have to tackle. �* , ., s, challenge which we all have to tackle. �*, ., ., ., ., tackle. let's have a look now at the international— tackle. let's have a look now at the international reaction _ tackle. let's have a look now at the international reaction to _ tackle. let's have a look now at the international reaction to the - tackle. let's have a look now at the international reaction to the latest l international reaction to the latest developments. wejoin global international reaction to the latest developments. we join global chief economist at capital economics. what is the international market reaction to what we have seen today, a very dramatic term at —— turn of events here? it dramatic term at -- turn of events

here? .. . . dramatic term at -- turn of events here? . , , . dramatic term at -- turn of events here? ., , ., s_ dramatic term at -- turn of events here? .. , ., .,y ., ., here? it has been a day of two halves in _ here? it has been a day of two halves in the _ here? it has been a day of two halves in the financial - here? it has been a day of two| halves in the financial markets. here? it has been a day of two . halves in the financial markets. in the morning, the gilt market, the uk bond market, that rallied on the expectation that there might be some u—turns in the government's tax plans, the government would start to backtrack from some of the fiscal plans in the mini budget, the gilt market rallied, the cost of borrowing that the government pays came down and then the prime minister held a press conference and almost at that exact moment, interest rates that the government's charged on its borrowing started to go back up again in the market so we have had a day of two halves, where they rallied in the morning, the markets, and the bond markets have fallen again this afternoon. baths; markets, and the bond markets have fallen again this afternoon.— fallen again this afternoon. why do ou think fallen again this afternoon. why do you think that _ fallen again this afternoon. why do you think that is? _ fallen again this afternoon. why do you think that is? what _ fallen again this afternoon. why do you think that is? what does - fallen again this afternoon. why do you think that is? what does it. you think that is? what does it mean? how worrying is that? i think what it underscores _ mean? how worrying is that? i think what it underscores is _ mean? how worrying is that? i think what it underscores is that _ mean? how worrying is that? i think what it underscores is that when - mean? how worrying is that? i think what it underscores is that when it i what it underscores is that when it comes to fiscal policy, credibility is very easily lost, but much harder to win back. the government is talking and will say that a lot of this is down to international

issues, the borrowing costs are increasing in other countries as well, and that inflation is a problem in other countries. there is an element of truth that, that is the case, but the key point is that borrowing costs of the government have increased to a far greater extent in the uk than is the case with other large advanced economies, and the key point at which that change was around the mini budget. it was notjust change was around the mini budget. it was not just the tax change was around the mini budget. it was notjust the tax cuts that were announced, the fact they were underfunded, but it was the way it was done, the promise of more to come, the idea that the government would somehow be —— was being fiscally reckless, and that led to a lot of credibility, the interest rate in the markets charged on borrowing went up as a result, that is difficult to get back down now. it is difficult to see into the future, with everything changing especially so rapidly. do you think if liz truss was forced out, some interim leader in place, then, would that not bringing stability, not?

would the markets react unfavourably to that scenario? do we need a general election here to bring stability? general election here to bring stabili ? .. . .. general election here to bring stabili ? . , ., stability? that is a good question. i think stability, _ stability? that is a good question. i think stability, with _ stability? that is a good question. i think stability, with fiscal - i think stability, with fiscal policy, this is within the government grasp, there is a big enough majority, but it is the fact that at this particular government, it is ideological eat opposed to putting up taxes or cutting expenditure, and really, fiscal policy is about with —— arithmetic at the end of the day, and making sure the arithmetic adds up. i do not think we necessarily need a general election to create the fiscal responsibility, but the government being lit —— the problem is the government being responsible to take the action on tax or spending. if liz truss is ousted and a new prime minister comes in with a new cabinet, that might lead to a shift in attitudes and policies, but that remains to be seen. {iii

shift in attitudes and policies, but that remains to be seen. of course, liz truss that remains to be seen. of course, liz truss will _ that remains to be seen. of course, liz truss will be _ that remains to be seen. of course, liz truss will be hoping _ that remains to be seen. of course, liz truss will be hoping that - that remains to be seen. of course, liz truss will be hoping that she - liz truss will be hoping that she can remain in post and that she stays. she was the victor of a long protracted campaign. she was voted in by the conservative members here. is going to be possible for the markets, do you think, to wait for two weeks for that next statement? or are we going to have to wait from the prime minister and jeremy hunt, the prime minister and jeremy hunt, the new chancellor, some detail more quickly than that? thea;t the new chancellor, some detail more quickly than that?— quickly than that? they are going to have to tet quickly than that? they are going to have to get on _ quickly than that? they are going to have to get on the _ quickly than that? they are going to have to get on the front _ quickly than that? they are going to have to get on the front foot - quickly than that? they are going to have to get on the front foot for - have to get on the front foot for this, the prime minister and the new chancellor, they are going to have to come next week, the message has to come next week, the message has to be critical, they will have to get on the front foot, give the markets in idea, a flavour of what is going to be in that statement on the 31st and an idea of the rules of which they are going to be asking the obr tojudge which they are going to be asking the obr to judge than against, that is going to be important, and a sense of what is going to be in that statement. i do not think the idea that we can operate in a vacuum can exist in a vacuum, i don't think we

can exist in that vacuum until the end of the month. we can exist in that vacuum until the end of the month.— can exist in that vacuum until the end of the month. we are in a very unstable and _ end of the month. we are in a very unstable and unpredictable - end of the month. we are in a very unstable and unpredictable times, | unstable and unpredictable times, domestically in the uk and globally. what is the wider reaction to what is going on in the uk? from other nations? are they surprised at the turn of events? i nations? are they surprised at the turn of events?— turn of events? i think they are. the context _ turn of events? i think they are. the context here _ turn of events? i think they are. the context here is _ turn of events? i think they are. the context here is that - turn of events? i think they are. the context here is that for - turn of events? i think they are. the context here is that for the | the context here is that for the last 15 years since the global financial crisis, the has always been no limits on what governments can do with fiscal policy, placed upon them by markets, inflation's been a very low, growth has been weak, interest rates have been incredibly low, governments can borrow at low costs, suddenly inflation's back, interest rates are going up,, so it's a cost of borrowing, and governments everywhere are starting to wake up to the idea that there is now some real constraints on the budgets. and also that the margin of error for

fiscal policy now is incredibly small. there is not this idea that you can just borrow at will which existed for the last 15 years. there is no longer the case. in some senses, i think the uk, unfortunately, has been a canary in a coal mine for other governments and showing just how hard the budget constraints are in a world where inflation is back, interest rates are rising, suddenly fiscal discipline is more important than ever. . ., . discipline is more important than ever. , ., , ., . ., ever. there is lots of concerned now about public— ever. there is lots of concerned now about public spending _ ever. there is lots of concerned now about public spending and _ ever. there is lots of concerned now about public spending and for- ever. there is lots of concerned now| about public spending and for people looking at public services, the health services, education, all the things the public relies on here, there has been conflicting statements coming from the prime minister. there is a big question, so what do you think they need to say on that to reassure people? a different question to reassuring the public? different question to reassuring the tublic? .. different question to reassuring the tublic? ., ., ., . ,

public? there are two audiences, the markets and — public? there are two audiences, the markets and the _ public? there are two audiences, the markets and the public. _ public? there are two audiences, the markets and the public. to _ public? there are two audiences, the markets and the public. to some - markets and the public. to some extent, think the answer is the same, there needs to be a grown—up and sensible debate here. at the moment, the government seems to be promising american levels of taxation and european levels of public services. you cannot have that. there needs to be a public debate about what is the appropriate mix of policy here, what direction do they want to take do they want to have the american levels of taxation, but correspondingly fewer public services, or do they want to have european levels of taxation and european levels of public services? you can't have one without the other. so i think... this is the debate that has been missing, this is why the policies of this government have been so just —— disingenuous, they have been a promising idea that if you tax —— tax cuts, those tax cuts pay for themselves and that is how you find public services. we know from international experience and indeed the uk's own recent experience, that does not work that way. really, i

think a public debate around taxation and spending needs to be reset. is taxation and spending needs to be reset. . . . taxation and spending needs to be reset. . , , , ,., taxation and spending needs to be reset. , , , , ., reset. is liz truss the person that can deliver _ reset. is liz truss the person that can deliver and _ reset. is liz truss the person that can deliver and put _ reset. is liz truss the person that can deliver and put a _ reset. is liz truss the person that can deliver and put a u-turn - reset. is liz truss the person that can deliver and put a u-turn on i can deliver and put a u—turn on that? going back to the first point, the credibility to make a complete switch, she says she is no longer going to prioritise, for example, tax cuts and that she is going to accept that maybe these public spending limits need to exist? in spending limits need to exist? i'i fairness to the prime minister, spending limits need to exist? in fairness to the prime minister, she has been in office for a matter of weeks, but i think it slightly unfair to say at this juncture she is incapable of leading that level of debate, that shift in discourse. but the early signs are not promising, it does look like they are towards this view. she said in the commons on wednesday, during pmqs, there will be no spending cuts. that does not seem to suggest to me at least a pivot coming in the

debate, the discourse. it remains to be seen. i think it is slightly unfair at this moment to be thinking out for her. the omens at this stage are not entirely promising. obviously for people watching, thinking, quite like what does this mean for me? we have lost one chancellor, and we have a new chancellor, and we have a new chancellor coming at it from a very different political background? " what does that mean for my energy bills?" is it able to be set at this point where things are heading? i think we can start to sketch out what the landscape will look like and i think there are a couple of ways of household incomes and finances are going to be affected. the first is through the tax and spending policies of the new chancellor and governments. we know

that corporation taxes are going... are now going to go up. we do not know, the chancel�*s not said anything about national insurance, national insurance and tax rates, if a tax rate cut is planned in april and a tax cut in november this year, and a tax cut in november this year, and april next year, but the second question is a more fundamental one, candy chancellor and this government restore fiscal responsibility and get borrowing rates in the markets down and if they can, that is critical to get in the cost of borrowing for households and mortgages down. there are two things going on here. what is happening to personal rates of taxation and we have not heard from the chancellor on that, yes, and can they do a job of restoring fiscal responsibility, anchoring the borrowing costs in the market? if they can do that, then

mortgage borrowing costs and people coming off a mixed raid on to floating rates will face lower rates than what they will be coming off of, but it won't be quite as high as in two or three weeks ago. heii of, but it won't be quite as high as in two or three weeks ago. neil from tlobal in two or three weeks ago. neil from globalthink. — in two or three weeks ago. neil from global think, thank _ in two or three weeks ago. neil from global think, thank you _ in two or three weeks ago. neil from global think, thank you for _ in two or three weeks ago. neil from global think, thank you for giving . global think, thank you for giving us your thoughts today. we are poised here at downing street waiting possibly for someone it to emerge, not quite sure who, from number ten or number 11 downing st, we will come back to that as soon as we will come back to that as soon as we can of course, but it has been very dramatic few hours. kwasi kwarteng has lost his job as chancellor, he flew back from washington... jeremy hunt, are you going to change plan? jeremy hunt

just walking out of number ten after a pretty short meeting in fact presumably with the prime minister, we do not know what has gone on inside, but he was not inside for that long. about an hour i would say, but we saw him going in and we understand he might have been out of town initially when this appointment was made. he is now in place as chancellor, with a huge mountain to climb in terms of recovering the government's economic and political credibility. we are back with more in a few minutes. but let's first catch up with the weather. good afternoon. we've got a real mixture of weather types out there today. for some of us, some spells of blue sky and sunshine on offer, we've also got some showery rain moving its way through. and as we head through the next couple of days, things are going to turn a little bit more unsettled. we have so much i was moving away

southward and eastward across england and wales, temperatures at 6p and this evening are looking about 15 degrees or so, towards the south, but ten or 11 further north. into tonight, initially quite cold and clear, so i think an early frost, but later on in the night, more rain and clouds moved in from the west. the temperature is going to rise with the wind and the rain. an unsettled picture, and the first batch of showers clear on the east on saturday, but first dry and brighter, but for more showers come in. reasonably mild in the south, 16 or 17, 11-13 in. reasonably mild in the south, 16 or17,11—13in in. reasonably mild in the south, 16 or 17, 11—13 in the north.

this is bbc news. i'm geeta guru—murthy at downing street on the day liz truss says she's "absolutely determined" to remain as prime minister after she sacks her chancellor and announces a u—turn on corporation tax. i have therefore decided to keep the increase in corporation tax that was planned by the previous government. this will raise £18 billion per year. kwasi kwarteng accepts the prime minister's request for him to step aside just weeks into the job, but says he still believes in her vision for the economy. he's replaced byjeremy hunt, former health secretary, former foreign secretary and former leadership contender.

liz truss insists she's the right person to stay