It is an attempt to stem the bleeding from the mini-Budget. Under the Government's plans to reassure the City it will control spending, benefits payments are set to fall in real terms.
Efforts to calm the markets in the wake of the mini-Budget come as a new poll showed Labour had a 33 point lead over the Conservatives – believed to be the biggest held by any party since the late 1990s.
Liz Truss, the Prime Minister, and Kwasi Kwarteng, the Chancellor, yesterday made clear that a squeeze on government departments was coming – and refused to promise that benefits would rise in line with inflation.
But ministers did move to reassure pensioners the so-called "triple lock" remains, meaning state pensions will still rise in line with inflation despite the wider spending squeeze.
Ms Truss and Mr Kwarteng will this morning hold talks with the Office for Budget Responsibility amid criticism for failing to ask the fiscal watchdog to release a forecast alongside the mini-Budget.
Follow live after the pound rallied early today ahead of the meeting.
Meanwhile, it has emerged that the Bank of England was warned about a looming pension fund disaster five years before it was forced to intervene to prevent a meltdown in the bond market.
Lord Wolfson, the chief executive of Next, said his treasurer wrote to the Bank when it was governed by Mark Carney in 2017 about so-called liability-driven investment strategies. Read how he warned the Bank they faced a looming "time bomb".
The Bank's emergency purchase of gilts buys a reprieve of 13 days at enormous institutional risk, says Ambrose Evans-Pritchard as he argues that Ms Truss is embarked on a course of sheer madness.
Putin set for 'freak show' Ukraine annexation
Vladimir Putin is set to today formally annex Russian-occupied parts of eastern and southern Ukraine in a major speech that will herald a grim new phase of the war.
The illegal seizure of parts of the Donetsk, Luhansk, Kherson and Zaporizhzhia regions follows referendums by pro-Russian puppet governments that have been widely decried as "shams".
Russia correspondent Nataliya Vasilyeva reports how a close adviser of President Zelensky mocked the upcoming ceremony as a "Kremlin freak show".
It came as a former US army major and his anaesthesiologist wife were charged with plotting to leak medical records to Russia.
Coin featuring King and his mother unveiled
The first portrait of King Charles III to appear on currency has been unveiled today, as the Royal Mint marks the end of one era and the beginning of another with its first "double monarch" coin.
See the King's image, designed to look "more human" than previous official portraits of sovereigns, which will appear on commemorative £5 and 50p coins before the end of the year.
It came as the Princess of Wales was photographed hosting an event at Windsor Castle for the first time in her new official duties, as she welcomed sailors from the Royal Navy.
Today's political cartoon
Also in the news: This morning's other headlines
New 'European political community' | Liz Truss is set to meet European leaders next week at a new community initiative proposed by France's Emmanuel Macron. The Prime Minister will jet to Prague for the inaugural gathering of the "European political community", marking her second overseas visit since taking the reins of Downing Street. Joe Barnes reports the decision comes after the Élysée was left disgruntled by Ms Truss refusing to acknowledge the French president as an ally.
Cryptocurrency | Entrepreneur destroys $10m Frida Kahlo drawing
Around the world: Hurricane Ian's destruction
Joe Biden, the US president, has warned that Ian "could be the deadliest hurricane in Florida's history", saying that there could be a huge death toll if early reports were confirmed. "The numbers... are still unclear, but we're hearing reports of what may be substantial loss of life," he said. Yachts have been thrown on top of houses, millions of people are without power and hundreds of hospital patients have been evacuated, as the devastating damage wrought by the 150mph storm was laid bare. US correspondent Jamie Johnson has our coverage from Fort Myers.
Comment and analysis
Fraser Nelson | Truss is in big trouble; she's running out of time
David Frost | Why Kwarteng is right and Carney is wrong
Allison Pearson | God save us from wicked social media giants
Telegraph View | The Prime Minister must be clear and confident
Reader letters | Tax cuts are not to blame for economic reckoning
Sport briefing: Boycott hits out at reforms
Sir Geoffrey Boycott has warned that it will be the "death of county cricket" if controversial reforms to the game are adopted. A review led by Sir Andrew Strauss has recommended cutting the county championship from 14 to 10 matches and splitting the competition into a top tier of six teams and a second division of 12 divided into feeder leagues of six. Read Sir Geoffrey's latest column. Meanwhile, in one of the most dramatic finishes to a County Championship season, Yorkshire were relegated from Division One in near-miraculous circumstances.
Shakira's 'darkest hour' | Tax evasion charges and child custody battle
The butter board | Forget cheese, this is the newest food sensation
Business briefing: HSBC may quit Canary Wharf
HSBC is considering leaving its landmark Canary Wharf headquarters in London, as the Covid crisis ushers in a new era of flexible working. The bank, one of Britain's largest employers, is reviewing whether to keep its skyscraper after vowing to slash office space worldwide that is equal to 112 football pitches. Lucy Burton reports on a memo sent to staff.
Gardening tips: Grow ferns as houseplants
Ferns do not produce colourful flowers, but their enduring, textural foliage makes them a must for homes. Watering houseplants is a skill. Tom Brown, who admits to being guilty of killing his own with water-based kindness, offers these tips for the best way to keep ferns healthy.
Brothy mushroom tagliatelle with buckwheat and gremolata | Really punchy flavour is key with this dish by Eleanor Steafel.
And finally... for this morning's downtime
'Thank God I stayed alive – turns out it was worth it' | Billy Idol, the punk superstar who survived heroin addiction and motorcycle crashes, is now a doting grandfather – and he has never been happier. He speaks to music critic Neil McCormick.