Monday evening UK news briefing: Why the markets hated the mini-Budget

Evening Briefing logo
Evening Briefing logo

Good evening. After another day of market turmoil, the Bank of England has decided it will stick to its guns despite the pound crashing in the wake of Friday's mini-Budget. Read what it means for your money below.

Evening briefing: Today's essential headlines

The big story: Bank rules out emergency rate rise

All eyes are on the pound. Sterling crashed to an all-time low against the dollar this morning but rallied amid expectations the Bank of England was going to make an intervention to stabilise the currency.

This evening, the message came, but Andrew Bailey ruled out an emergency rate rise following the market rout.

The Governor said the bank's monetary policy committee "will not hesitate to change interest rates by as much as needed" to bring inflation under control.

Now attention turns to the markets to see if the decision to stop short of announcing an emergency meeting of the committee this week will be enough to steady the ship.

Minutes before the Bank's announcement, the Treasury confirmed that Kwasi Kwarteng will set out a medium-term fiscal plan on November 23.

It follows turmoil in the markets since the chancellor last week unveiled the biggest package of tax cuts in 50 years and hinted at more to come.

Mortgage repayments could surge by as much as £800 per month for typical homeowners as financial markets bet on 6pc rates next year. Our business live blog will have the market reaction.

Andrew Bailey - Hollie Adams/Bloomberg
Andrew Bailey - Hollie Adams/Bloomberg

Liz Truss and Mr Kwarteng have been accused of "playing A-Level economics" by a former minister amid rumours that MPs are already handing in letters of no confidence in the Prime Minister.

As concern mounts after the pound hit a record low against the dollar, one MP warned that Ms Truss would be in danger if interest rates begin to rise.

The robust comments come as UK government borrowing costs have soared above 4pc for the first time in more than a decade as a historic rout on bond markets in the wake of Mr Kwarteng's mini-Budget deepens.

Read how investors have continued to dump UK debt.

Why the pound is falling

The fall in the value of sterling brought the pound to its lowest level since its decimalisation in 1971, when pence and shillings were shelved.

The pound remains down 21pc so far this year. Why have investors been put off by the 'Plan for Growth' unveiled by the chancellor?

Eir Nolsøe and Tom Rees explain why the markets hated the mini-Budget so much – and what happens next.

A weak pound against the dollar means it will be more expensive to buy American goods.

Lauren Almeida reveals what the falling pound means for your wallet in everyday life and some buy-to-let investors have given tips on how to getting the most out of property investments.

The mini-Budget has undoubtedly seen Ms Truss stake out her ground and John Longworth urges the Prime Minister to stand firm in what he sees as the battle for the future of Brexit Britain.

Matthew Lynn outlines why there is not going to be a Truss-bust.

Reinstating 45p rate

The mini-Budget has allowed Labour to pitch a starkly alternative approach to the economy.

Rachel Reeves used her speech at the Labour party conference to announce that a government led by her party would reinstate the 45p top rate of income tax and use the money to pay for the "biggest expansion of medical school places in British history".

It came as Lisa Nandy said Labour could give councils power to spend income tax locally as part of a "great rebalancing" of devolution.

Here is the latest from the conference in Liverpool.

On the Chopper's Politics podcast, Lord Mandelson has said Britons now think it is "safe" to vote Labour again but Tom Harris says Tony Blair won a landslide because he had an alternative and engaging vision, which Sir Keir Starmer does not.

Comment and analysis

Around the world: Protect gay rights, Italy warned

France warned Italy today not to wind back women's access to abortion or rights for gay people, hours after the country elected its most Right-wing government since the Second World War. A rightist alliance led by Giorgia Meloni, the head of the Brothers of Italy party, secured around 44pc of the vote, securing a comfortable majority in both chambers of parliament. Reacting to the result, Elisabeth Borne, the French prime minister, said the EU had certain values to uphold, such as on abortion and human rights. Nick Squires profiles Ms Meloni, the heiress to Italy's fascists who will become the country's first female leader. William Nattrass says her victory will reignite Eurosceptic conservatism.

Monday interview

'My children kiss me on the head, hoping to kiss the dementia away'

Steve Thompson - Mark Pinder/Guzelian
Steve Thompson - Mark Pinder/Guzelian

Rugby World Cup winner Steve Thompson talks to Jim White about living with early-onset dementia

Read the interview

Sport briefing: England captain accuses India of lying

England captain Heather Knight accused India of lying about warning Charlie Dean over leaving her crease as the Mankad controversy that engulfed Saturday's ODI at Lord's took a new twist. This morning, India bowler Deepti Sharma revealed she had alerted England batter Dean about leaving her crease before running her out in cricket's latest 'Mankad' incident. Sharma was booed by the crowd at Lord's on Saturday when she ran Dean out at the non-striker's end to win the third ODI. Dean was left in tears after the incident. The dismissal has divided opinion in our comments sections between condemnation, endorsement and nuance. Simon Heffer says we need to get used to the Mankad, which is legal and a sad result of cricket's pursuit of victory at all costs.

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Business briefing: Net zero adviser in clash with Truss

Liz Truss's net zero adviser has risked a clash with the Government after he warned fracking will be a "non-starter". Conservative MP Chris Skidmore warned investors they could wind up with "stranded assets" if they back shale gas drilling and they should put their money into renewables instead. His comments appear at odds with the new administration which has talked up the prospects of fracking as it lifts the ban on the practice as part of a rush to shore up domestic supplies of energy. The practice, which involves blasting sand and water underground to release gas trapped between rocks, was in its infancy in the UK when it was banned in 2019 due to concerns about earthquake risk. In an article for the Telegraph, business secretary Jacob Rees-Mogg argues we must get more home-grown energy on stream urgently.

Tonight starts now

Nations League | Never before in the history of football has a "dead rubber" for England had so much riding on it. They will run out at Wembley Stadium, in front of a sell-out 90,000 crowd, to face Germany fearful of another unconvincing performance and – damagingly – being booed by their own fans for a third game in a row. What a send-off that would be for the World Cup. Trent Alexander-Arnold has been left out of England's matchday squad meaning he will not have played a minute in the final two games before the World Cup squad is named. Jason Burt examines how under-fire Gareth Southgate is battling short memories ahead of tonight's loaded Germany match. Follow the match here.

Three things for you

And finally... for this evening's downtime

Chill in the air | With energy costs high and a stressful winter ahead for many, there are cheap and easy ways to lower your bills. Read on for tips on how to keep the heating off until November.

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