Thursday morning news briefing: Stealth raid on incomes despite mini-Budget

She said she would reduce the burden of the state to unleash growth. But despite Liz Truss's "tax-cutting" mini-Budget, a detailed analysis reveals today that the Treasury will impose an additional £21 billion of income taxes.

The average household will be £1,450 a year worse off as a result of the stealth raid, according to the Institute for Fiscal Studies.

The typical basic rate taxpayer will pay an extra £500 in income tax and National Insurance per year by 2026, while higher rate earners are facing a £3,000 annual increase.

The figures are based on analysis of the decision by Kwasi Kwarteng to freeze tax thresholds. As deputy economics editor Tom Rees reports, the so-called fiscal drag effect is likely to form a key part of a report by the Office for Budget Responsibility, which is due to be delivered to the Chancellor tomorrow.

Last night, Fitch became the third credit rating agency to signal that the Prime Minister's tax cuts had put the UK at risk of a downgrade.

Early today, the pound held steady against the dollar. Follow the latest updates in our live blog.

Today, Ms Truss will travel to Prague for a meeting of the European Political Community, the brainchild of French president Emmanuel Macron.

Speaking on the fringes, she will urge him to work with the UK to curb migrant crossings and shore up energy supplies.

After her first speech to the Tory party conference as leader, Juliet Samuel writes that, before taking on the world, Ms Truss must first look to her core voters.

PS: Do you have at least £11,900 in savings? Charlotte Gifford explains how you could be facing an unexpected tax bill.

Rapidly advancing Ukraine 'could retake Crimea'

Ukraine could retake Crimea if it continues to recapture territory from fleeing Russian forces at its current rate, senior US military officials believe.

The assessment came as Vladimir Putin for the first time acknowledged battlefield setbacks and Ukrainian troops pursued the Russian army into the Luhansk region, reversing one of the Kremlin's key gains of the war.

Western officials have previously considered the retaking of Crimea by force as impossible because Russia was expected to fight tooth and nail to defend it.

But a senior US officer told The Telegraph that recent Russian military collapses meant "the recapture of Crimea by Ukraine is a distinct possibility".

Associate editor Dominic Nicholls explains Ukraine's three likely routes of attack. And Con Coughlin argues that the end of Vladimir Putin is fast approaching.

Sprinkling of Dahl magic – Matilda The Musical review

Roald Dahl's novel Matilda – a rousing tale of a brilliant little girl thwarting some awful grown-ups – was converted into a stage musical 12 years ago, becoming a parable about self-expression.

Now, Matthew Warchus's screen adaptation of that show has opened at the London Film Festival.

Robbie Collin says the story has been streamlined to just under two hours without blunting its poison-tips – with Emma Thompson playing a deranged villain to remember. Read his five-star review.

Daily dose of Matt

Matt finds humour in the Conservative party conference for today's cartoon. For behind-the-scenes insight, try Matt's newsletter.

Also in the news: This morning's other headlines

Strike action | Surgery for thousands of NHS patients could be cancelled if nurses go on strike, it has emerged, as union voting opens today on walkouts over pay. As Lizzie Roberts reports, around 300,000 members of the Royal College of Nursing are being asked if they want to take industrial action. Meanwhile, Liz Truss is under growing pressure to honour a pledge to crack down on unions with new legislation as rail bosses plot new walkouts in the run-up to Christmas.

• Grammars | Pledge to drop ban could be held until next election

• Rolf Harris | Disgraced entertainer 'gravely ill with neck cancer'

• Clocks decolonised | Why time is up for 'master' and 'slave'

• Baby names | Oliver knocked off top spot for boys after eight years

• Royals | Mothers must focus on self-care, says Princess of Wales

Around the world: Armed guards enforce airport

Chinese tourists have been filmed confronting armed guards in hazmat suits after an airport was locked down. Officers with guns and shields moved to push back crowds who have been left stranded in Xishuangbanna airport in the province of Yunnan. As Jenny Pan and Verity Bowman report, the lockdown was introduced after 61 Covid infections were reported in the area yesterday morning.

Comment and analysis

• David Frost | Do not give up on Liz Truss just yet

• Michael Deacon | Come back, Boris – all is forgiven

• Vernon Bogdanor | Greenpeace constitutionally illiterate

• Telegraph View | Tories must back PM’s bold plan

• Reader letters | Tories must pull themselves together

Sport briefing: Chelsea sweep Milan aside

Reece James' thunderbolt strike put the seal on Graham Potter's first Stamford Bridge win as Chelsea boss as the Blues thumped AC Milan 3-nil to revitalise their Champions League campaign last night. Chief football correspondent Jason Burt has our match report from Stamford Bridge. At the Etihad stadium, Man City thrashed Copenhagen 5-nil.

Editor's choice

1. On life support | The crisis facing our high-street pharmacies

2. Property | Best home renovations to add more space at a low cost

3. Fashion | The high street power dress that all women should trust

Business briefing: Saudi Arabia 'aligning with Russia'

Saudi Arabia has been accused of siding with Russia to maintain a stranglehold on oil exports and prevent prices from falling further. The Opec+ global cartel of oil producing countries defied Joe Biden and agreed to cut output by 2m barrels per day – the largest reduction since the height of the pandemic in April 2020. Meanwhile, Henry Samuel reports how France was forced to tap into its strategic fuel reserves after a string of petrol stations, notably on its Channel borders, ran dry.

Travel: Luxury train journeys for less

The greatest rail adventures will never be cheap, but with a bit of know-how you can find style and drama at a more affordable price. Luke Abrahams has your guide to four amazing trips on some of the world's greatest mega-luxe train journeys that need not break the bank.

Tonight's dinner

Pasta with mussels and cannellini beans | This dish by Diana Henry is a glorious combination of shellfish with tender pasta and is ready in 40 minutes.

And finally... for this morning's downtime

'Sean Connery? Never heard of him' | The first James Bond film began life with a tiny budget, no stars and low expectations – then 'Ursula Undress' emerged from the sea. Exactly 60 years after its release, Adam Bloodworth explains why nobody rated Dr No.