Pound today: Truss ‘lost in denial’ over market turmoil as UK ‘step closer to recession’

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Full exchange: Keir Starmer accuses Liz Truss of being ‘lost in denial’ over market turmoil

Sir Keir Starmer has accused Liz Truss of being “lost in denial”, as the prime minister claimed to have “protected” the UK economy.

The Labor leader said: “There is no point trying to hide it, everyone can see what has happened. The Tours went on a borrowing spree, sending mortgages rates through the roof … [Homeowners] won’t forget and they won’t forgive. Nor should they.”

The prime minister faced the Commons for the first time since her chancellor’s mini-budget was blamed for unleashing commotion in the markets and sending the pound into freefall.

Ms Truss was forced to defend the credibility of her economic plan, which is focused on borrowing money to fund growth-boosting measures – a vision now overshadowed by Kwasi Kwarteng’s U-turn over plans to scrap the top rate of tax.

But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warned the UK step was “a big closer to a recession”, which may not end until late next year at the earliest.

He added: “We look for a 0.5 per cent quarter-on-quarter drop in GDP in the fourth quarter, building on a similar decline in the third quarter, and a 1.5 per cent year-over-year decline in 2023 as a whole .”

Key PointsShow latest update 1665577263We won’t reverse tax cuts, says Treasury minister

Treasury minister Chris Philp has insisted there are no plans to reverse any of the tax measures announced in the Government’s “growth plan”.

Conservative MP Mel Stride, who chairs the Treasury Select Committee, told the Commons: “The Chancellor was quite right to have brought forward the date for the medium-term plan and OBR forecast.

“He has, of course, a huge challenge now landing those plans to reassure the markets. He has to get the fiscal rules right, he has to come forward with spending restraint and revenue raisers that are politically deliverable.

“Given the huge challenges, there are many – myself included – who believe it is quite possible that he will simply have to come forward with a further rowing back on the tax announcements that he made on September 23.

“So could I ask (Mr Philp) to confirm that that possibility is still on the table?”

Mr Philp replied: “There are not any plans to reverse any of the tax measures announced in the growth plan.”

Jane Dalton12 October 2022 13:21

1665576789Reverse mini-Budget, says shadow chancellor

Shadow chancellor Rachel Reeves has called on the Government to “put aside their pride and reverse this catastrophic mini-budget”.

She asked in the Commons what guarantees the Government would give on the “currency slide”, how many repossessions there will be if the Government does not change course, and how much more the Government is borrowing on debt interest due to higher borrowing costs.

She said: “While ministers desperately try to blame global conditions, why is it that no other central bank in the world has had to step in three times in less than three weeks to protect financial stability?

“The country now faces a very serious situation. Ahead of the ending of the Bank of England’s emergency operations this Friday, what action will the Government take to ensure that their budget doesn’t have further consequences for financial stability or for people’s pensions?

“This is a Tory crisis made in Downing Street, but it is ordinary working people who are paying the price, and it can only be resolved when the Conservatives put aside their pride and reverse this catastrophic mini-budget, and they must do so now .”

In a tweet, she accused the PM of ducking responsibility.

Jane Dalton12 October 2022 13:13

1665574786

Prime Minister’s Questions closes with an assertion from Liz Truss that “the last thing we need is a general election.”

It comes as the House of Commons is to debate a 575,000-signature petition calling for an early national ballot.

Emily Atkinson12 October 2022 12:39

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Liz Truss has said her business secretary Jacob Rees-Mogg is drawing up plans to advise people how to save energy, despite having reportedly rejected his initial proposals.

She told the Commons that Mr Rees-Mogg was “working on a plan to help companies and individuals use energy more efficiently, we’re also working on this across government.

“I was delighted to speak to my friend yesterday… and I hope we will be able to start this going in No 10 straight away.”

Emily Atkinson12 October 2022 12:35

1665574129Liz Truss ‘lost in denial’, says Keir Starmer as PM claims she won’t cut public spending

Labor leader Sir Keir Starmer accused Liz Truss of being “lost in denial”, as the prime minister claimed to have “protected” the UK economy.

Ms Truss claimed at PMQs that she would not have to cut public spending, despite market turmoil sparked by the borrowing spree set out in chancellor Kwasi Kwarteng’s mini-Budget.

Asked by the Labor leader whether she keep her Tory leader campaign not to cut public spending, Ms Truss replied: “Absolutely.”

Our political correspondent Adam Forrest reports:

Liz Truss ‘lost in denial’, says Keir Starmer – as PM claims no spending cuts ahead

PM jeered in Commons after claiming she ‘protected’ British economy

Emily Atkinson12 October 2022 12:28

1665573586Watch: Keir Starmer says public is ‘sick to back teeth of excuses’ from Tory government

Keir Starmer Says Public Is ‘Sick To The Back Teeth Of Excuses’ From Tory Government

Emily Atkinson12 October 2022 12:19

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Prime minister Liz Truss appears to have ruled out public spending cuts.

Asked by Keir Starmer to rule out “public spending reductions”, she replies “absolutely.”

Emily Atkinson12 October 2022 12:18

1665572985Liz Truss stands by pledge to scrap no-fault evictions

Liz Truss has promised to stand by a Tory manifesto pledge to scrap so-called “no fault” evictions.

The prime minister was last week accused of “betraying” renters amid reports the policy could be ditched.

Our policy correspondent Jon Stone has more on Liz Truss’s latest pledge:

Liz Truss stands by pledge to scrap no-fault evictions

Liz Truss has promised to stand by a Tory manifesto pledge to scrap so-called “no fault” evictions.

Emily Atkinson12 October 2022 12:09

1665572870Truss ‘lost in denial’, says Starmer

Labor leader Sir Keir Starmer has accused Liz Truss of “ducking responsibilty” and being “lost in denial” after she refused to tell MPs whether her government is in any way responsible for the current crisis in UK financial markets.

“No wonder investors have no confidence in her government,” he said, adding that people are “sick to the back teeth of excuses and blame shifting.”

Emily Atkinson12 October 2022 12:07

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Liz Truss commits to end no-fault evictions as promised in 2019 Conservative manifesto. More details to follow.

Emily Atkinson12 October 2022 12:03

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