Live: Chancellor Hunt reverses many mini-budget measures in emergency statement

New Chancellor Jeremy Hunt issued an emergency statement as he seeks to restore stability following weeks of turmoil on the financial markets.

Mr Hunt confirmed he is ditching many of the measures in the mini-budget, including the planned cut to income tax.

The Chancellor addressed MPs in a statement to the House of Commons later in the afternoon.

London’s stock exchange, the pound, and Government bonds all rallied on the day the Chancellor reversed the majority of his predecessor’s key fiscal policies in one sitting. The FTSE 100 closed 61.45 points higher, or 0.9%, at 6,920.24.

Sterling also saw a welcome rebound, jumping more than 2.2% against the US dollar in the afternoon.It was up 2.2% to 1.145 dollars when markets closed, and 0.9% higher at 1.1601 against the euro.

6.54pm

Liz Truss met Sir Graham Brady, chairman of the powerful 1922 Committee of backbench Tory MPs, on Monday.

No 10 sources confirmed the meeting, saying it was “private” and “pre-planned”.

As calls grow for the Prime Minister to go, it is likely that her lack of support among her own MPs came up.

Afterwards, Ms Truss appeared unreactive and stared straight ahead as she sat next to her new Chancellor Jeremy Hunt in the Commons chamber.

Liz Truss acknowledged “mistakes have been made” at a meeting of the One Nation group of Tory MPs, according to Conservative Party chairman Jake Berry.

Leaving the meeting, he told journalists there had been a focus on “unity”.

“The Prime Minister started by saying that mistakes have been made, she acknowledged them, she is bringing the party together,” he said.

He said Ms Truss had been “exceptional”, and he had not heard any irritation towards her in the meeting, however he noted it was still going on.

6.17pm

Senior Conservative MP Mel Stride indicated that Tory MPs will be discussing Liz Truss’s position at a dinner on Monday evening organised to discuss economic policy.

He told BBC Radio 4’s PM programme: “Will we be discussing other matters? I’m afraid that everybody’s discussing other matters.”

6.13pm

Prime Minister Liz Truss has arrived at a meeting of the One Nation group of Tory MPs in Westminster.

6.04pm

Culture Secretary Michelle Donelan has arrived in Downing Street.

Jeremy Hunt said he would seek to reduce taxation as soon as he can.

Conservative MP Richard Drax (South Dorset) said: “Can I just remind the House, particularly on the opposition benches, that it is in the main the private sector that raises the money that pays the tax for the public sector and we cannot go on hammering the private sector if we want to seek the growth we want.

“So can I ask (Mr Hunt) … that he bears this in mind, reduces taxation as soon as he is able to.”

Mr Hunt replied: “The answer is yes and to demonstrate I understand what he’s talking about when he talks about the private sector I’m going to say some words I’ve always dreamed of saying behind this despatch box, which is that I used to be an entrepreneur.”

5.53pm

Senior Tory backbencher Sir Charles Walker has become the fifth Conservative MP to publicly call on Liz Truss to resign as Prime Minister.

He told Sky News: “I think her position is untenable. She has put colleagues, the country, through a huge amount of unnecessary pain and upset and worry.

“We don’t need a disruptor in No 10. We need a uniter.”

The situation “can only be remedied” with “a new prime minister,” he said.

He gave Ms Truss another “week or two” before she steps down or is forced to resign, adding that he is “so cross” about how “catastrophically incompetent” the Government has been.

Jeremy Hunt says concerns over mortgages are at the “top of my mind”, adding he has sounded out the Bank of England on what they need to hear.

He said: “It’s not for the Government to say what the Bank of England does when the Monetary Policy Committee makes its decision on interest rates.

“But of course I have had conversations with the governor to ask him what it is the Bank needs to hear for them to feel the inflationary pressures will be lower and they will not have to make as high an increase as perhaps some people are predicting, and thinking about the concerns of our constituents’ mortgages is top of my mind.”

5.52pm

Jeremy Hunt defended lifting the cap on bankers’ bonuses saying “we will get more tax from rich bankers with the policy we now have”.

Labour’s Siobhain McDonagh asked: “When the Chancellor dismantled Trussonomics overnight, why on earth did he decide to carry on boosting bankers’ bonuses in the heart of a cost-of-living crisis?”

Mr Hunt replied: “Because the policy didn’t work and we will get more tax from rich bankers with the policy we now have.”

5.40pm

Jeremy Hunt has failed to guarantee benefits will increase in line with inflation as he told the Commons he is not making “firm commitments” on any individual elements of tax and spending.

5.35pm

Jeremy Hunt has failed to guarantee the Government will deliver on its commitment to spend 3% of GDP on defence.

The Conservative chairman of the Commons Defence Committee and former minister Tobias Ellwood asked him in the Commons: “My friend knows the world is getting more dangerous, not less.

“Will he commit to continuing that promise of 3% GDP defence spend?”

The Chancellor replied: “Well, it won’t be a secret to my right honourable friend that I’m sympathetic to that because I’ve campaigned for it when I was a backbencher very loudly and visibly, but all of these things have to be sustainable.

“Any increase in defence spending has to be an increase that we can sustain over very, many years. Let me just say to him today that I agree with him entirely, that the duty of the Government is security for the population in all senses of the word.”

A Conservative MP has urged the Chancellor to “slay the dragon of fracking” as it was not in the Conservative Party manifesto.

Simon Hoare, MP for North Dorset and chair of the Northern Ireland Committee, told the Commons: “My right honourable friend is newly empowered, and he’s able to slay many dragons, could he slay the dragon of fracking which was not in our manifesto?”

Jeremy Hunt replied: “The Government position is very clear, we will not proceed unless there is local support.”

5.28pm

On the triple lock for pensions, the Chancellor told MPs “I’m not making any commitments on any individual policy areas”.

5.25pm

Mr Hunt accepted there had been “economic turmoil” over the last few weeks, as he said the Scottish independence would be a “recipe” for austerity.

Responding to the SNP’s Alison Thewliss in the Commons, he said: “I would remind her that this Conservative Government is spending £37 billion this year to support people across the United Kingdom with cost-of-living concerns.

“That is possible because of difficult economic decisions that the SNP have opposed at nearly every stage.”

The Chancellor faced calls to promise that important infrastructure projects in the north of England would not be scrapped in light of the squeeze on public spending.

Conservative MP Kevin Hollinrake (Thirsk and Malton) asked: “Can he confirm any cuts to spending will not impact on capital expenditure, infrastructure expenditure, particularly across the north and that we will fully deliver on projects that we have already committed to such as Northern Powerhouse Rail?”

Jeremy Hunt replied: “As he will know, there are very important projects that we all care about a great deal, but given the severity of the situation at the moment we are not taking anything off the table whether tax increases or spending reductions.

“But I don’t believe it is possible to have a long-term credible economic growth strategy that doesn’t recognise the vital importance of capital spending.”

5.21pm

Jeremy Hunt, replying to Rachel Reeves, told the Commons: “Behind the rhetoric … I don’t think she disagreed with a single one of the decisions that I announced to Parliament and that is important for the country and markets to know.

“And I think there is also agreement on the process of policy making. I support the independence of the Bank of England, introduced by Gordon Brown, and I know she supports the independence of the OBR to set up by George Osborne. The whole Government supports the independence of those two important institutions.

“I fully accept, and I don’t think that I could have been more clear that we have had to change some decisions made in the last few weeks, but what I reject wholeheartedly is her broader narrative about Conservative economic management.”

5.20pm

The Chancellor has said he is “not against the principle” of windfall taxes, after calls from the Liberal Democrats to increase the levy on oil and gas profits

Lib Dem leader Sir Ed Davey called on Jeremy Hunt to “undo one of the Government’s biggest injustices”, adding that this was “it’s failure to impose a proper windfall tax on the record profits of the oil and gas companies earned only because Putin is killing innocent Ukrainians”.

Mr Hunt replied: “I am not against the principle of taxing profits that are genuine windfalls. But as he will know very well in the energy industry, it is a very cyclical industry and there are businesses that have periods of feast and famine and you have to be very careful that you don’t tax companies in a way that drives away investment.

“We have said that nothing is off the table.”

5.19pm

SNP Treasury spokesperson Alison Thewliss said a “cliff edge” is now looming in April when the energy price guarantee ends.

She told the Commons that “economic chaos” was an “understatement” for the situation, and added: “I’m not sure words have yet been invented to describe the scale of unmitigated disaster which the Prime Minister and her chancellors have created in the past 24 days.

“We are back where we started, significantly worse off, due to Tory incompetence.”

Ms Thewliss accused the Government of “doubling down on austerity” and said excess deaths have been linked to Tory austerity policies in Scotland, “an unacceptable human cost”.

5.15pm

Rachel Reeves highlighted that Jeremy Hunt had suggested cutting corporation tax from 25% to 15% during his Tory leadership pitch, telling MPs: “The truth is had he won the contest and implemented these policies, we would be in an even worse place than we are now. There is no mandate and no authority for any of this.”

Ms Reeves said people will be “paying a Tory mortgage premium for years to come”, adding: “Does the Chancellor accept that once credibility and trust have been destroyed, it cannot simply be regained by a series of zig-zagging, chaotic U-turns? Will he and the Prime Minister apologise for the costs and anxieties laid on families?

“Can he admit once and for all that the market turmoil we are in was directly caused by the disastrous decisions of his predecessor and of the Prime Minister?”

Ms Reeves questioned why the Government has not abolish non-dom tax status in a bid to raise £3 billion a year.

5.14pm

Labour has opened up a 36-point poll lead, the largest for any party since October 1997, according to a survey by Redfield and Wilton Strategies.

Among those who said they will vote and excluding “don’t knows”, 56% said they would back Labour (up three points since October 13), while the Tories were down four points on 20%, the Liberal Democrats were on 11%, the Green Party on 5%, SNP 4% and Reform 2%.

Including the 19% who did not know which way they would vote, the Labour lead was 31 points, with Sir Keir Starmer’s party on 47% and the Tories on 16%.

The pollster surveyed 2,000 eligible voters in Great Britain on Sunday.

5.11pm

Senior Conservative MP Mel Stride said the Chancellor appeared to have steadied the markets “in the very short term at least”.

Mr Stride, who chairs the Commons Treasury Committee, told the Commons: “I welcome my right honourable friend’s statement, it was both frank and bold. And it appears, in the very short term at least, to have steadied the markets.”

Ms Reeves said of Jeremy Hunt: “The latest office holder has been in Cabinet for nine of the last 12 years, at the centre of a government responsible for low growth and weakened public services, and him responsible for helping run the NHS into the ground; he was a big part of austerity season one and now he says the cure is austerity season two.”

5.08pm

Rachel Reeves said Liz Truss has “no authority, no credibility, no plan for growth”, adding: “It is clear for all to see: the people who caused the chaos cannot be the people to fix the chaos. They are out of ideas, out of touch and out of time.”

Ms Reeves said the Prime Minister should have addressed the Commons on Monday, adding: “But we know she could not do that with a shred of credibility given that the survival of this Government depends on smashing to smithereens everything she stands for, and now she is attempting to reverse everything she campaigned for, it’s not just impossible, it is absurd.

“The Prime Minister is barely in office, and she is certainly not in power. Only five days ago she said at Prime Minister’s Questions there would be ‘absolutely’ no public spending reductions.

“But after what we heard from the Chancellor today, every single public service is again at risk from the Conservatives, from our NHS nurses to our schools and to our servicemen and women, with the country paying the price for their incompetence.”

5.06pm

Shadow chancellor Rachel Reeves warned the “damage has been done” despite the “humiliating U-turns”.

She said of new Chancellor Jeremy Hunt: “The fourth in four months of chaos and fiasco as this Conservative Government spirals down the political plughole. But the damage has been done.

“This is a Tory crisis made in Downing Street butt ordinary working people are paying the price.

“All that is left after these humiliating U-turns are higher mortgages for working people and higher bonuses for bankers. And their climb-down on energy support begs the question yet again – why won’t they extend a windfall tax on energy producers to help foot the bill?”

Mr Hunt said: “The Government is currently committed to cutting the basic rate of income tax to 19% in April of 2023. It is deeply held Conservative value, a value that I share that people should keep more of the money they earn.

“Which is why we have continued with the abolition of the Health and Social Care Levy, but at a time when markets are asking serious questions about our commitment to sound public finances, we cannot afford a permanent discretionary increase in borrowing worth £6 billion a year.

“So I’ve decided that the basic rate of income tax will remain at 20% and it will do so indefinitely until economic circumstances allow for it to be cut.”

4.58pm

Mr Hunt said growth requires “confidence and stability”.

He told the lower chamber: “We remain completely committed to our mission to go for growth, but growth requires confidence and stability, which is why we are taking many difficult decisions starting today.

“But whilst we do need realism about the challenges ahead, we must never fall into the trap of pessimism.”

Jeremy Hunt said he and the Prime Minister have “reluctantly” agreed it would not be responsible to keep the energy price guarantee beyond April 2023.

The Chancellor told the Commons: “The third step I’m taking today, is to review the energy price guarantee. It is the biggest single expense in the growth plan and one of the most generous schemes in the world, it’s a landmark policy for which I pay tribute to my predecessor, my right honourable friend from Spelthorne and it will support millions of people through a difficult winter reducing inflation by up to 5%.

“So I confirm today that the support we are providing between now and April next year will not change.

“But beyond next April, the Prime Minister and I have reluctantly agreed it would not be responsible to continue exposing the public finances to unlimited volatility in international gas prices.”

4.56

Chancellor Jeremy Hunt told MPs: “We’ve therefore decided to make further changes to the mini-Budget immediately rather than waiting until the medium-term fiscal plan in two weeks’ time in order to reduce unhelpful speculation about those plans.”

He added: “We’ve decided on the following changes to support confidence and stability. Firstly the Prime Minister and I agreed yesterday to reverse almost all the tax measures announced in the growth plan three weeks’ ago that have not been legislated for in Parliament.

“So we will continue with the abolition of the Health and Social Care Levy, changes to stamp duty, the increase in the annual investment allowance to a million pounds and the wider reforms to investment taxes, but we will no longer be proceeding with the cuts to dividend tax rates saving around a billion pounds a year.

“The reversal of the off-payroll working reforms introduced in 2017 and 2021, saving around two billion pounds a year. The new VAT free shopping scheme for non-UK visitors, saving a further two billion pounds a year or the freeze on alcohol duty rates saving around £600 million a year.”

4.55pm

The Chancellor has announced the formation of a new economic advisory council to provide “more independent expert advice” to the Government.

Jeremy Hunt told the Commons he “fully” supports the “vital, independent” roles of the Bank of England and the Office for Budget Responsibility.

However, he added: “But I also want more independent expert advice as I start my journey as Chancellor. So, I’m announcing today the formation of a new economic advisory council to do just that.

“This council will advise the Government on economic policy with four names announced today. Rupert Harrison, former chief of staff to the chancellor of the Exchequer, Gertjan Vlieghe from Element Capital, Sushil Wadhwani of Wadhwani Asset Management and Karen Ward of JP Morgan.”

4.50pm

Jeremy Hunt said the UK has faced “short-term difficulties” caused by the lack of an Office for Budget Responsibility forecast alongside the so-called mini-budget.

Speaking in the Commons, he said: “I want to be completely frank about the scale of the economic challenge we face. We have had short-term difficulties caused by the lack of an OBR forecast alongside the mini-budget.

“But there are also inflationary and interest pressures around the world.”

4.49pm

Penny Mordaunt said Liz Truss will be Prime Minister for Prime Minister’s Questions on Wednesday.

Labour MP Justin Madders, who is a shadow business minister but was speaking from the backbench, asked: “I’ve been drawn in Prime Minister’s Questions on Wednesday, can she guarantee that the current Prime Minister will be answering them?”

The Commons Leader said: “Yes.”

4.45pm

Chancellor Jeremy Hunt told MPs: “Russia’s unforgiveable invasion of Ukraine has caused energy and food prices to spike.

“We cannot control what is happening in the rest of the world, but when the interests of economic stability means the Government needs to change course, we will do so and that is what I have come to the House to announce today.”

Speaking about his meetings on taking the position, he added: “The conclusion I have drawn from those conversations, is that we need to do more, more quickly to give certainty to the markets about our fiscal plans and show through action and not just words that the UK can and always will pay our way in the world.”

Former veterans’ affairs minister Johnny Mercer has said the Conservative Party under Liz Truss is a “libertarian” party and that she has lost authority by handing Labour a massive poll lead.

In an interview with Men’s Health magazine, he said: “The truth is that the Conservative party is no longer a Conservative party. It is a libertarian party.

“That’s fine if you’re a libertarian but I am not. I’m a life chances Tory. I want to give opportunity to the kids here who haven’t had it.”

Asked if the Prime Minister could get him back, Mr Mercer told Alastair Campbell: “Well, she has changed her views a lot over the years. There is an extraordinary arrogance here. You come in and within 28 days, you’ve gifted a 33-point lead to the Opposition.

“It’s hard to get people to do what you want them to with that on your record. Almost impossible.”

Jeremy Hunt warned of “decisions of eye-watering difficulty”.

Speaking in the Commons, he said: “That means decisions of eye-watering difficulty. But I give the House and the public this assurance, every single one of those decisions, whether reductions in spending or increases in tax, will be shaped through core compassionate Conservative values that … prioritise the needs of the most vulnerable.”

4.40pm

Making a statement in the Commons, Chancellor Jeremy Hunt said: “We are a country that funds our promises and pays our debts.

“And when that is questioned, as it has been, this Government will take the difficult decisions necessary to ensure there is trust and confidence in our national finances.”

4.40pm

A Downing Street source said Liz Truss had been in “wall-to-wall meetings” with Cabinet colleagues and officials.

During a Commons urgent question Penny Mordaunt told MPs the Prime Minister had a genuine reason to be absent from Parliament but “I can’t disclose the reasons”.

MPs asked time and again where the Prime Minister was, after Liz Truss failed to appear to answer a question on sacking the Chancellor last week.

Labour MP Dame Margaret Hodge: “She has said a number of times that there are good reasons why the Prime Minister is not here this afternoon. In the interests of total transparency and in the interests of proper accountability, and to restore confidence in markets, will she give us those reasons?”

Commons Leader Penny Mordaunt replied: “She will have to be content with my assurances. I can’t disclose the reasons. I have asked if I can. I am being very genuine with the House on this matter. I hope that she will be able to join us a bit later on this afternoon.”

Labour MP Stephanie Peacock (Barnsley East) joked that the Prime Minister was “on the way to the palace”.

But Ms Mordaunt replied: “I would very much like to be able to tell all colleagues what the Prime Minister’s business is today but there are very serious matters as well as economic matters that are in the Prime Minister’s in-tray and as people will know she comes to this House on a regular basis and she will be here tomorrow but she is not able to be here at this precise moment.”

Ms Truss later arrived in the chamber.

4.28pm

Prime Minister Liz Truss arrived in the Commons chamber ahead of a statement from Chancellor Jeremy Hunt.

Commons Leader Penny Mordaunt had been repeatedly asked about the Prime Minister’s whereabouts after Ms Truss sent her to respond to a Labour urgent question in Parliament.

4.05pm

SNP deputy Westminster leader Kirsten Oswald accused Liz Truss of “hiding in Downing Street”.

She said: “Today Scotland’s First Minister set out an optimistic, ambitious and credible economic plan for Scotland’s future. A leader who spent over an hour setting out and answering questions on the positive case for our country’s independence.

“It’s a very stark constant to a Prime Minister hiding in Downing Street. A Prime Minister terrified to answer for the mess she has made. The mess which will cause so much harm to all of our constituents.”

4.04pm

Penny Mordaunt has apologised in the Commons that the events leading to the changes today have “added to the concerns” about the “major volatility” in the economy.

The Commons Leader’s comments came after Liberal Democrat leader Sir Ed Davey asked her: “The previous prime minister shattered the public’s trust in the Government.

“The current Prime Minister has trashed the British economy.

“Meanwhile, Conservative MPs have sat there and let it happen. So for the damage and pain they have caused across our country, will the Leader of the House on behalf of the whole party, address the people and businesses of our great country and apologise?”

Ms Mordaunt replied: “We have made this change for a reason. And I understand that people want certainty and reassurance about their bills, their businesses, and their benefits.

“And I am sorry that the events leading to the changes today have added to the concerns about the major volatility that was already there existing in the economy. That’s why we are putting it right today.”

Liz Truss is “not under a desk”, according to Penny Mordaunt.

Labour MP Stella Creasy (Walthamstow) said it is the job of the Prime Minister to take big decisions on many issues, adding: “All we know right now is, unless she tells us otherwise, the Prime Minister is cowering under her desk and asking for it all to go away.

“Isn’t it about time she did and let somebody else who can make decisions in the British national interest get in charge instead?”

Ms Mordaunt replied: “Well, the Prime Minister is not under a desk, as the honourable lady says…”

The minister could barely be heard at this point due to laughter and heckling from opposition MPs.

4.02pm

Penny Mordaunt said a general election would cause “weeks of disruption and delay”.

Responding to Labour in the Commons, she criticised Sir Keir Starmer, saying he blocked an election three years ago when Parliament was “paralysed by Brexit” and a general election “would have been in the national interest”, and for supporting Jeremy Corbyn when he was Labour leader.

She said: “Today, when the country needs some stability and urgent legislation to put through cost of living measures, and while we are in the middle of an economic war levelled at every school and hospital in this country, he now calls for one and weeks of disruption and delay.

“We will take no lectures from the honourable gentleman on working in the national interest.”

4pm

Prime Minister Liz Truss has left Downing Street.

Ms Truss was seen leaving at the back of Number 10 in a silver Range Rover shortly before 3.50pm.

3.55pm

Responding to Labour in the Commons, Penny Mordaunt said: “I’m quietly confident that the Leader of the Opposition will not have his 15 minutes of fame.”

Sir Keir Starmer said the Prime Minister has no mandate, saying instead of leadership there is a “vacuum”.

He told the Commons: “Now is a time for consistent messaging. But what do we get? A Prime Minister saying absolutely no spending reductions, a Chancellor saying there will be cuts. A Prime Minister saying she’s in charge, a Chancellor who thinks he’s the CEO and she’s just the chair.

“How can Britain get the stability it needs when all the Government offers is grotesque chaos? How can Britain get the stability it needs, when instead of leadership we have this utter vacuum?

“How can Britain get the stability it needs when the Prime Minister has no mandate from her party and no mandate from the country?”

3.51pm

Sir Keir Starmer accused the Government of inflicting “long-term damage that can’t be undone”.

The Labour leader, asking an urgent question in the Commons, said: “There is long-term damage that can’t be undone. Once you’ve crashed a car at 100mph you’ve damaged it for good, and you’re going to be paying much more on your insurance for years to come.

“And it’s working people who will pay.”

3.47pm

Sir Keir Starmer mocked Liz Truss for not turning up to answer the urgent question, saying “the lady is not for turning – up”.

Sir Keir said: “It’s time for leaders to lead. But where is the Prime Minister? Hiding away, dodging questions, scared of her own shadow. The lady is not for turning – up.”

3.40pm

Penny Mordaunt, replying to Labour’s urgent question, told the Commons: “The Prime Minister has taken the decision to appoint (Jeremy Hunt), one of the longest-serving and most experienced parliamentarians, as her Chancellor.

“Their overriding priority is to restore financial stability in the face of volatile global conditions.

“We will take whatever tough decisions are necessary and have made changes to the growth plan, which the Chancellor is waiting to update the House on as soon as this urgent question finishes.”

3.38pm

Shouts of “where is she?” and “weak” could be heard in the House of Commons after Penny Mordaunt deputised for Liz Truss to respond to an urgent question on the Prime Minister’s decision to appoint a new chancellor.

Commons Leader Ms Mordaunt said: “With apologies to the Leader of the Opposition and the House, the PM is detained on urgent business… and I’m afraid you’ll have to make do with me.”

3.35pm

Jeremy Hunt is the sixth chancellor in three years and faces a steep learning curve as he takes over with no prior Treasury experience.

But Mr Hunt is no stranger to Government roles, having spent his 17-year career in politics in a variety of Cabinet jobs.

Mr Hunt was promoted to health secretary during a Cabinet reshuffle in 2012, and he was made foreign secretary after the shock resignation of Boris Johnson in 2018.

In the Brexit referendum, Mr Hunt campaigned to remain in the EU, but quickly recast himself into a brazen Brexiteer within months of the vote.

Following the resignation of prime minister Theresa May in 2019, he announced he would campaign to become leader of the Conservative Party but was the runner-up in the race, losing to Mr Johnson.

The new PM offered Mr Hunt the job of defence secretary but he declined it.

He then stepped back from the front benches for several years, focusing on his role as chairman of the Health and Social Care Committee, a role he was elected to at the beginning of 2020.

Earlier this year, Mr Hunt revealed that he had had cancer and had since recovered.

The son of Admiral Sir Nicholas Hunt, he enjoyed a privileged upbringing that saw him educated at the prestigious Charterhouse school.

He went on to read philosophy, politics and economics at Oxford University, where he was a contemporary of former prime minister David Cameron and Mr Johnson.

Before entering Parliament, Mr Hunt set up educational publishing firm Hotcourses, which was later sold to Australian outfit IDP Education for £30.1 million in 2017, making him one of the richest politicians in the UK.

3.20pm

The Bank of England will still have a task on its hands to rein in rampant inflation, which is now expected to rise by more than expected next year, given that the energy support package will come to an end in its current universal form in April.

Samuel Tombs, at Pantheon Macroeconomics, said: “Current wholesale prices suggest that energy bills will rise by about 73% in April for households that will not be entitled to any further support.

“That would boost the outlook for the headline rate of CPI (Consumer Prices Index) inflation by 4.8 percentage points for the 12 months from April 2023.”

Falling gilt yields and interest rate expectations will also have the welcome effect of helping cut borrowing costs for the Government.

This will make it slightly easier to get the public finances on a sustainable path, but Mr Tombs warned the Chancellor still has a long way to go.

He estimates that while £31 billion of savings have now been found, “the Chancellor still needs to find annual savings of about £40 billion, if the OBR is to forecast that the debt-to-gross domestic product ratio will fall in three years’ time”.

2.54pm

Economists have already begun reining in their expectations for interest rates after new Chancellor Jeremy Hunt took the axe to nearly all of his predecessor’s mini-budget plans.

The independent forecasts from the Office for Budget Responsibility (OBR) are still the glaring omission in the Government’s latest announcements and markets will have to wait until the full medium-term statement on October 31 for those.

But the overall thinking is that the immediate economic calamity may have been narrowly avoided.

Philip Shaw, at Investec, said: “Our initial thought is that the growth outlook may be weaker but this could be tempered by the Bank rate potentially not needing to rise as far as our current forecast of 5% early next year.”

All eyes will now be on the Bank’s next rates decision on November 3 when it also provides its latest set of economic forecasts.

2.46pm

Justice Secretary Brandon Lewis has left Number 10.

He smiled at photographers and journalists before getting into his black Range Rover in Downing Street.

Journalists shouted: “Is the Prime Minister going to resign, sir?” as he climbed into the vehicle, but Mr Lewis did not respond.

2.45pm

Campaign groups and industry organisations have warned that the end of the energy price support could “heap huge financial pressure” on households come April.

Mike Foster, chief executive of the Energy and Utilities Alliance, said: “News that the energy price cap protection coming to an end in April will surprise and worry millions of hard-pressed families.

“Together with the announcement that promised tax cuts have also been withdrawn will heap huge financial pressure on to those already struggling to pay their bills.”

National Energy Action said ending the energy guarantee after six months is an “almighty trade-off” and has created “huge uncertainty” for households.

Chief executive Adam Scorer said questions need answering “quickly” on who will continue to get support, whether this will include people who do not receive benefits and whether support will be greater for those in the most need.

He continued: “Households on the lowest incomes are already rationing their energy usage to dangerous levels. £2,500 is beyond their means.

“Many vulnerable people were holding on by their fingertips. Government has to be very, very careful it doesn’t prise them away.”

2.30pm

Chief Whip Wendy Morton has left Downing Street ahead of Chancellor Jeremy Hunt’s statement to the Commons this afternoon.

Elsewhere, plans to freeze alcohol duty rates from February 1 2023 for a year have been ditched.

The Scotch Whisky Association said the move will add to pressures for the hospitality industry and household budgets as costs inevitably increase.

Emma McClarkin, chief executive of the British Beer and Pub Association, said: “The Chancellor’s decision today to reverse the alcohol duty freeze is a huge blow to brewers and pubs.”

2.20pm

Jeremy Hunt’s announcement will impact on people’s pay packets.

But now the cut from 20% to 19% has been put on hold indefinitely, until economic circumstances allow for a cut.

Had the cut come into place in April 2023, an average UK earner on £30,000 a year would have paid £174 less in tax next year, according to wealth managers Quilter.

But, on the other hand, a previously announced national insurance cut will remain in place – and a £30,000 earner could still be around £218 better off annually because of this, Quilter said.

2.15pm

What does the Chancellor’s emergency statement mean for mortgages and rents?

Mortgage rates have rocketed in recent weeks amid the wider turmoil in the markets, although figures from Moneyfacts.co.uk indicate there have already been signs of mortgage rates steadying over the weekend.

Monday’s U-turn announcements could help to shore up market confidence, in turn helping to steady mortgage rates.

The choice of mortgage products remains significantly lower than before the mini-budget.

Bank of England base rate hikes have also been pushing up mortgage rates in recent months and further base rate rises are expected.

Mortgage rate hikes also feed into the costs paid by buy-to-let landlords, which could mean some have to put their rents up or even sell up if letting is less profitable.

Supply shortages in the rental sector are already putting an upward pressure on rents.

Simon Gammon, managing partner at Knight Frank Finance, said: “While we don’t expect mortgage rates to fall in the short term, stability in the swaps market should slow the pace of rising mortgage rates relative to some of the worst case scenarios that looked possible in the days following the mini-budget.

“Only time will tell as to whether this is a temporary reprieve, however.”

2.09pm

Here is what Chancellor Jeremy Hunt’s emergency statement means for energy bills:

Under the previously announced energy price guarantee, the average household would pay around £2,500 annually for their energy bill, although as the cost was limited per unit and not per bill, some households would pay more, depending on their energy use.

But on Monday Mr Hunt said that, while the guarantee will continue until next April, a review will be launched to consider how to support households and businesses with energy bills after April 2023.

The review will design a new approach aiming to cost taxpayers significantly less than planned, while ensuring enough support for those in need, the Government said.

Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.

Households are already receiving both widespread and targeted support to help with energy costs.

2pm

Institute for Fiscal Studies director Paul Johnson said: “Fiscal credibility is hard won but easily lost. Today’s announcements won’t be enough by themselves to plug the gap in the Government’s fiscal plans.

“Nor will they be enough to undo the damage caused by the debacle of the last few weeks, but they are big, welcome, clear steps in the right direction.

“It is also encouraging that, with most of the tax cuts abandoned, perhaps the most growth-friendly of them, the stamp duty cut and the increased annual investment allowance for corporation tax, remain.”

He warned that “Jeremy Hunt will still have to make some scary decisions on tax and spend this Halloween and it remains hard to see where significant spending cuts could come from”.

Mr Johnson said the plan to change the energy price guarantee was “especially welcome” as “we need to do everything possible to put in place a better designed, better targeted and less expensive scheme next year”.

1.47pm

Leader of the House Penny Mordaunt will respond to Labour’s Commons urgent question on Liz Truss’s behalf at 3.30pm, Downing Street confirmed.

The question, in the name of Sir Keir Starmer, on the economic situation is directed to the Prime Minister after she refused to come to the House after the sacking on Friday of Kwasi Kwarteng.

1.45pm

Senior Tory backbencher Sir Charles Walker said Liz Truss’s position is “enormously precarious” after abandoning almost her entire economic policy.

Sir Charles, a former vice-chairman of the 1922 Committee of backbench MPs, told BBC Radio 4’s The World At One: “If there was a general election tomorrow – which there won’t be – we’d be a smaller party than the SNP.

“We wouldn’t even be the party of opposition. That’s bound to concern colleagues – hundreds of colleagues.

“The Prime Minister’s position is enormously precarious. When you are in this sort of position I think you have got to expect the party won’t tolerate for any length of time – certainly not weeks.”

1.40pm

Business groups welcomed the new Chancellor’s emergency announcement for providing confidence and stability.

CBI chief economist Rain Newton-Smith said: “The Chancellor is acting swiftly and firmly in looking to restore confidence to markets and businesses.

“Macroeconomic stability is the number one priority right now – the pre-condition to economic growth.

“Businesses will work closely with the Chancellor on an affordable plan for sustainable economic growth that drives investment and supports living standards.”

Kitty Ussher, chief economist at the Institute of Directors, said: “It is of course right for the Government to focus on restoring stability and confidence – without that growth is impossible.”

1.36pm

Jeremy Hunt is the fourth person to hold office as chancellor in the space of four months.

Chancellor Jeremy Hunt has told Tory MPs that Liz Truss “backed him to the hilt” in tearing up her mini-budget measures and that there are more “difficult decisions” to come.

A read-out from the meeting said: “The Chancellor held a briefing for parliamentary colleagues in the Commons at 1230.

“The Chancellor emphasised the need for stability and said that the PM should be commended for changing tack in the face of the deteriorating global economic situation.

“He said that the PM had backed him to the hilt in making the difficult decisions of which there are more to come.

“The Chancellor said that voters look forward not back and as Conservatives we will have by far the best long-term plan for the economy.”

1.21pm

The Resolution Foundation think tank said the latest mini-budget U-turns mean the size of the tax cuts for the typical British household next year have been slashed from £500 to £290, and from £5,380 to £1,650 for the richest 10% of households.

“Having promised to reduce taxes, the Government is now setting taxes on course to rise as a share of GDP to around 36% by the end of the Parliament – up from 33% at the start,” the Resolution Foundation said.

Chief executive Torsten Bell added: “This is now very clearly a tax-raising parliament, with the tax take set to reach highs not sustained since 1950.

“The price of shielding the public finances from wholesale gas markets next year is more pressure on households, with the energy price cap now on course to hit £4,000 next April – almost double its effective level today.

“These are tough choices being made by the new Chancellor that will reduce the scale of public spending cuts set to be announced on October 31 – even more so if they lead markets to reduce the interest rates they charge government for borrowing.

“But, with tens of billions of spending cuts still to come and a new energy support package needing to be devised, many of Jeremy Hunt’s tough choices still lie ahead.”

1.13pm

Jeremy Hunt’s decision to abandon the freeze in alcohol duty was condemned by the Scotch Whisky Association.

Mark Kent, the trade body’s chief executive, said: “Business can only work on the basis of certainty and stability.

“That has been stripped from the Scotch whisky industry following the Chancellor’s decision to U-turn on the duty freeze for Scotch whisky announced just over two weeks ago.”

He warned the decision would “add to pressures in the UK hospitality industry, and household budgets as costs inevitably increase”.

1.07pm

Labour has been granted a Commons urgent question on the economic situation after Liz Truss refused to come to the House after the sacking on Friday of Kwasi Kwarteng.

The question, in the name of Sir Keir Starmer, is directed to the Prime Minister although she can delegate a more junior minister to answer for her.

It is expected to take place at 3.30pm, delaying Chancellor Jeremy Hunt’s statement.

A Labour Party spokesperson said of the Tories: “With the Chancellor junking the majority of its kamikaze budget today, the Prime Minister should have come to the House to make a statement.

“If she had a shred of authority left she would turn up.”

12.47pm

In response to the Chancellor’s latest financial statement, Welsh government finance minister Rebecca Evans said: “The complete unravelling of the mini-budget shows the chaos at the heart of the UK Government.

“In the space of six short weeks the UK Government’s reckless and flawed economic policy has caused mayhem in the financial markets, pushed up mortgage costs and stretched household budgets even further.

“Now the UK Government is rolling back on its energy price support scheme for households, something that will only add to the uncertainty people are facing as they worry about paying their bills.

“The new Chancellor has signalled a new era of austerity to start to fill the hole in public finances.”

12.45pm

Sadiq Khan claimed the Government has “run out of ideas” after Jeremy Hunt ditched most of the remaining policies from Kwasi Kwarteng’s mini-budget.

“The Government’s in shambles – it’s clearly chaos,” the Mayor of London told the PA news agency.

“What’s clear now is this Government’s run out of road, it’s run out of ideas. And that’s why it’s so important for them to actually give the British public the chance for voting for a fresh start and call a general election.”

12.43pm

Shadow chancellor Rachel Reeves said the Conservatives “have lost all credibility”.

She said in a statement: “The Chancellor said that growth requires ‘confidence and stability’ yet it’s clear that the Tories can’t provide this.

“There will continue to be a huge cost to families because of the actions of this Tory Government.

“The humiliating climb-down on their energy plan begs the question yet again – why won’t they bring in a windfall tax on energy producers to help foot the bill?”

12.39pm

Justice Secretary Brandon Lewis has arrived in Downing Street.

Mr Lewis was seen arriving in a black Range Rover at Number 10 just before 12.15pm.

He smiled at photographers as he entered the building but did not say anything.

Downing Street insisted the Prime Minister was still in charge despite Chancellor Jeremy Hunt tearing up her economic strategy.

Asked who was running the country, Ms Truss’s official spokesman said: “The Prime Minister. She has been working closely with her Chancellor over the weekend to agree this approach.

“Of course there are a raft of other areas on which she will continue to lead the country, not least in our response to the war in Ukraine.”

Cabinet ministers have been invited to No 10 for an informal “reception” on Monday evening as Ms Truss battles to save her premiership.

12.35pm

The reversal of Liz Truss’s tax-slashing measures will have “an impact” on investment and growth, Downing Street has said.

Asked whether the Prime Minister still wants to reduce the tax burden, her spokesman said: “You’ve heard from the Prime Minister on a number of occasions and indeed the new Chancellor on their views on ensuring people can keep more of the money.

“We recognise that economic stability is important, particularly seeing some of the global headwinds we are right now and that’s why we have made these changes”.

Pressed on whether Ms Truss still believes raising corporation tax will damage investment and growth, the official conceded that the decisions “do have to have an impact.”

He said there was “no single factor” that forced Ms Truss to rip up her mini-budget, but said she acknowledged its measures had gone “too far too fast”.

12.30pm

Asked about the credibility problem Liz Truss now faces after the mini-budget U-turns, her official spokesman said she was providing “stability of leadership”.

The spokesman said: “The Prime Minister is listening to the public.

“She is listening to advice on the markets, she is listening to her colleagues and she is making the necessary difficult decisions to change our approach so that we can provide the economic stability and indeed maintain that stability of leadership which is important.”

Pressed on whether Ms Truss accepted she had a credibility problem, the spokesman said: “The Prime Minister is demonstrating that she is able to make the difficult decisions necessary to provide the leadership for this country.”

12.28pm

Liz Truss still believes in the importance of growing the economy despite the ripping up of her tax-cutting plans, Downing Street insisted.

Challenged over the markets’ loss of faith in her, the official, while refusing to comment on “day-to-day market movement”, said: “The Prime Minister and the Chancellor agree on the importance of economic stability. That’s why they have made this decision that the Chancellor is setting out today.

“But they still fundamentally believe in the importance of boosting growth.”

The spokesman refused to pre-empt the Chancellor’s statements to the Commons later on Monday and on October 31, but stressed that “we are introducing a number of supply-side measures alongside that”.

12.21pm

Prime Minister Liz Truss insisted her Government’s change of tack “supports and delivers” for people across the country.

In a tweet about an hour after Chancellor Jeremy Hunt’s statement, she said: “The British people rightly want stability, which is why we are addressing the serious challenges we face in worsening economic conditions.

“We have taken action to chart a new course for growth that supports and delivers for people across the United Kingdom.”

12.17pm

Angela Richardson, who has become the fourth Conservative MP to publicly call on Liz Truss to resign as Prime Minister, told Matt Chorley on Times Radio: “We saw those unfunded tax cuts. Had that not happened, the markets would not have responded the way that they did, we would not be seeing the fact that there’s potentially an extra £10 billion that we’ve got to try and plug.”

The Guildford MP added: “And I believe that’s 100% down to the Prime Minister, I’m afraid, and so I just don’t think that it’s tenable that she can stay in her position any longer and I’m very sad to have to say that.”

Asked whether she had written a letter to head of the 1922 Committee of backbenchers Sir Graham Brady expressing her loss of confidence, Ms Richardson said: “I said during the difficulties with Boris Johnson that any correspondence between Sir Graham Brady and myself, if that were ever to eventuate, would be a private matter, that I wouldn’t discuss that publicly, and there’s no reason to change that now.”

12.14pm

Video: Hunt scales back energy price cap duration as he acts to stabilise markets

Downing Street sidestepped questions on whether Liz Truss will be resigning and said the Prime Minister remains “focused on delivery”.

Asked about the possibility, her official spokesperson told reporters: “You heard from the Prime Minister on Friday. She’s working very closely with the Chancellor and they discussed the package which the Chancellor is setting out today.

“As she said on Friday, she is focused on delivery.”

Pressed on what is left for Ms Truss to deliver on given the ripping up of her leadership campaign promises, the official said she and her new Chancellor Jeremy Hunt “agree that it’s vitally important” that she delivers on her mission for “going for growth”, including investment zones and boosting the UK’s energy supply.

“There is a raft of work that the Government is delivering on and the Prime Minister is leading on.”

12.05pm

Scotland’s First Minister Nicola Sturgeon said “thank goodness we didn’t act so rashly” after Jeremy Hunt announced most of his predecessor’s tax cuts were being scrapped.

Ms Sturgeon tweeted in response to the new Chancellor’s emergency announcement on Monday morning.

Discussing the abandoned reduction in the basic rate of income tax, she said: “Another reminder of the many demands made of @scotgov to immediately match this without any consideration of cost and impact.

“Thank goodness we didn’t act so rashly.”

12.02pm

Angela Richardson has become the fourth Tory MP to call publicly for Liz Truss to stand down, saying the problems with the public finances were “100% down to the Prime Minister”.

She told Times Radio: “I just don’t think that it’s tenable that she can stay in her position any longer. And I’m very sad to have to say that.”

11.55am

Video: How could the Tories get rid of Liz Truss?

For a prime minister to lose their job they must either resign, their party must lose a general election or they must lose a confidence vote.

But current Conservative Party rules forbid a confidence ballot for another 11 months and the next general election is not due until late 2024.

11.51am

The Chancellor’s emergency statement came as Prime Minister Liz Truss remained under pressure, with some Tory MPs calling for her ousting after a disastrous start to her premiership.

The Prime Minister sacked her chancellor Kwasi Kwarteng and effectively ditched her economic agenda in a bid to restore credibility to her administration after revealing a mini-budget that sent markets into meltdown.

The U-turns have seemingly done little to quash growing disquiet within the party, with MPs Crispin Blunt, Andrew Bridgen and Jamie Wallis calling for her resignation on Sunday.

11.47am

The pound strengthened and UK government bonds rallied further as Jeremy Hunt announced plans to reverse key policies in former chancellor Kwasi Kwarteng’s mini budget.

Sterling rebounded by more than 1.2% to 1.139 against the US dollar shortly after Mr Hunt gave his emergency statement to calm the financial markets.

Yields on 30-year government bonds, or gilts, eased back further by around 10%, as the new Chancellor set out plans to shave off billions of Government debt.

The interest on long-dated bonds hit a low of around 4.32% shortly after the first announcement.

11.30am

The Government’s main objective will be ensuring “stability”, the Chancellor said.

Indicating that some Government spending would have to be cut, Jeremy Hunt said: “The most important objective for our country right now is stability.

“Governments cannot eliminate volatility in markets but they can play their part and we will do so, because instability affects the prices of things in shops, the cost of mortgages and the values of pensions.”

11.28am

The UK will “always pay its way”, the Chancellor said.

Jeremy Hunt said: “Growth requires confidence and stability and the United Kingdom will always pay its way.

“This Government will therefore take whatever tough decisions are necessary to do so.”

11.27am

Liz Truss held a political Cabinet call at 10am to discuss the decision to scrap the mini-budget measures.

The Chancellor set out the “worsening global economic situation, with interest rates rising around the world as monetary policy returns to a sense of normality”, a No 10 source said.

Jeremy Hunt is expected to meet all secretaries of state this week to decide on future spending plans which will then be submitted to the Office for Budget Responsibility on Friday.

11.25am

Jeremy Hunt announced that help with energy bills for households will only last until April, with a review to find a “new approach” that will “cost the taxpayer significantly less”.

In an emergency statement, the new Chancellor said: “The biggest single expense in the growth plan was the energy price guarantee.

“This is a landmark policy supporting millions of people through a difficult winter and today I want to confirm that the support we are providing between now and April next year will not change.

“But beyond that, the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.

“So I’m announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

“Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.”

11.23am

Government spending in “some areas” will be cut, the Chancellor confirmed.

Jeremy Hunt said: “There will be more difficult decisions, I’m afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.

“All departments will need to redouble their efforts to find savings and some areas of spending will need to be cut.

“But as I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.”

11.22am

The Chancellor said he remained “extremely confident” about the country’s long-term economic prospects, but added: “Growth requires confidence and stability and the United Kingdom will always pay its way.

“This Government will therefore take whatever tough decisions are necessary to do so.”

11.21am

The basic rate of income tax will remain at 20p indefinitely, Chancellor Jeremy Hunt said.

The rate had been due to reduce to 19p from April under Kwasi Kwarteng’s mini-budget, a year earlier than Rishi Sunak had planned.

But Mr Hunt said it would now stay at 20p until economic conditions allowed a reduction.

He said: “It is a deeply held Conservative value – a value that I share – that people should keep more of the money that they earn.

“But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.”

11.20am

Chancellor Jeremy Hunt said his tax cut reversals will raise some £32 billion a year as part of efforts to get the public finances back on track.

In an emergency statement, he said: “The measures I’ve announced today will raise every year around £32 billion.”

11.19am

The Government will continue with its planned cut to stamp duty and its reversal of the 1.25 percentage point increase in national insurance contributions, the Chancellor said.

11.18am

Chancellor Jeremy Hunt confirmed he is ditching many of the measures in the mini-budget, including the planned cut to income tax.

In an emergency statement, he said: “We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.

“So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates.”

Help with energy bills for all households will only last until April, with Jeremy Hunt announcing a review to look at a “new approach” to target support at those worst off after that.

11.12am

The Government will ditch plans for new VAT-free shopping for international tourists, Mr Hunt said.

11.11am

BREAKING: Chancellor Jeremy Hunt has announced the Government will scrap plans to reduce the basic rate of income tax from 20% to 19% in April next year, a move that had been forecast would cost the Exchequer almost £5.3 billion in 2023-24.

11.09am

Former culture secretary Nadine Dorries warned her colleagues they must support Liz Truss or bring back her predecessor Boris Johnson to avoid a general election.

She tweeted: “There is no unity candidate. No one has enough support.

“Only one MP has a mandate from party members and from the British public – a mandate with an 80 seat majority. @BorisJohnson

“The choices are simple – back Liz, if not bring back Boris or face a GE within weeks.”

11.05am

Chancellor Jeremy Hunt left 11 Downing Street at around 10.30am.

He is due to give a televised statement from inside the Treasury at around 11.15am prior to his announcement to the House of Commons this afternoon.

Video: Jeremy Hunt to make emergency statement in bid to stabilise the markets