Chancellor to reveal parts of his medium-term fiscal plan today, Treasury says

Chancellor Jeremy Hunt will reveal parts of his medium-term fiscal plan later today – two weeks earlier than planned.

The Treasury said the chancellor, who was installed on Friday, was fast-tracking the plans, which will be released in full on 31 October.

It said the decision followed conversations with Prime Minister Liz Truss over the weekend and a meeting with the governor of the Bank of England and the head of the Debt Management Office on Sunday night.

Politics latest: More U-turns expected on mini-budget

Mr Hunt is set to make a statement at 11am before addressing the House of Commons at around 3.30pm.

However, Mr Hunt is not expected to announce any detail on spending cuts and a cabinet meeting will be held this evening to discuss the specifics. It will be the first time Ms Truss will have seen her cabinet since sacking Kwasi Kwarteng as chancellor.

Torsten Bell, chief executive of the Resolution Foundation think tank, said Mr Hunt is acting today to reduce how many tax and spending announcements he has to make.

“The Office for Budget Responsibility (OBR) won’t have finalised the interest rate assumptions underpinning their government debt interest forecast,” he said.

“So, pre-announcing tough choices is about hoping that markets reduce rates on government debt, therefore a smaller fiscal hole to fill on 31 October.”

The markets fell into turmoil after Mr Kwarteng’s mini-budget partly due to the lack of an OBR forecast being provided.

Today’s statement is aimed at calming the markets, with the expectation that Mr Hunt will reverse or delay all other tax cuts announced in the mini-budget that have not already been implemented or agreed upon.

Stamp duty changes and a £13bn cut to national insurance contributions has already gone through the House of Commons.

But it is likely the 1p cut in income tax, due to come in April 2023, will be put on hold, Sky News’ political editor Beth Rigby said.

Fund at risk if Treasury had not made early call

One of the reasons the Treasury announced at 6am the chancellor would make a statement was to calm the markets before they opened, Sky News’ economics editor Ed Conway said.

He said there was one fund at one investment management firm that remains exposed after the Bank of England stopped its intervention into the bond market on Friday.

“Were those bond yields to have risen sharply this morning, that particular fund would have been in trouble,” he said.

“You would have had potentially margin calls and potentially the risk of a run dynamic in the banks, so a spiral in which gilts have to be sold.

“That hasn’t happened because those bond yields have come down, because the chancellor is making a statement because the Bank of England has made a statement.

“That is why the chancellor was very concerned and why the Treasury announced there was going to be a change in plan early, before markets opened.”

MPs believe it is simply not sustainable for Truss to remain as PM

I was told by a cabinet source Liz Truss had no option but to sack Kwasi Kwarteng because it was made clear to her he’d lost the confidence of markets and her only hope of steadying the ship was removing him.

But what follows from that is obvious: as a second cabinet source put it to me over weekend, what the markets do in the coming few days will be critical for Ms Truss too.

The firewall provided by the chancellor is now burnt through and if there’s no improvement, the signal will be that the problem is her.

Politically the view settling amongst MPs is that it’s simply not sustainable for her to remain as prime minister.

All eyes are now on Sir Graham Brady, the only person who knows when a leadership election has been triggered, to see what he does. Party rules say Ms Truss has a year’s grace, but they can change the rules.

But there’s also a view, shared by some Truss rivals and backers alike, that the PM has bought a bit of time.

As one cabinet minister told me: “Despite the hysteria, the reality is we need to calm down, let Liz decide her new priorities and Jeremy deliver his budget. Nothing will be gained in the next 14 days by more fratricide.”

But the point is, as Conservative Home’s Paul Goodman put it, it’s over for Ms Truss whether she’s pushed out or not.

Her economic project is finished and her authority is gone. And that makes it very hard to see how she can lead the party into a general election.

I’ll be watching the markets and Sir Graham very closely on Monday.

Calls for Truss to go

Ms Truss is facing calls to resign from three Tory MPs following the economic turmoil in the wake of the mini-budget.

Tory MPs Crispin Blunt, Andrew Bridgen and Jamie Wallis have publicly stated they believe she should resign, while Labour leader Sir Keir Starmer has called on Ms Truss to face parliament and accused her of being “in office but not in power”.

The Daily Mail reported that Tory MPs will try to oust Ms Truss later this week, with more than 100 ready to submit letters of no confidence.

Mr Hunt has insisted the prime minister is still in charge during media appearances over the weekend, though he said a tough package of tax rises and spending cuts was necessary in order to steady the UK economy.

Sir Anthony Seldon, historian and political biographer, told Sky News the factory line of chancellors and prime ministers over the past few months is “beyond incompetent” and it is clear Mr Hunt is “all-powerful” and is aiming to take over from Ms Truss.

“Jeremy Hunt is clearly the grown-up this government has lacked,” he said.

“If Tory MPs know any history they will get behind this Truss-Hunt government which is actually a Hunt-Truss government.”

Sir Keir said Ms Truss’s brief news conference to explain her latest U-turn on Friday “completely failed to answer any of the questions the public has”.

The Labour leader said: “Mortgages are rising and the cost of living crisis is being felt ever more acutely. The Conservative government is currently the biggest threat to the security and the finances of families across the country.

“That’s why the prime minister must come to parliament on Monday, to explain what she plans to do to turn the situation around.

“If the prime minister won’t take questions from journalists, Liz Truss must at least take them from MPs representing the families whose livelihoods she’s putting at risk.”

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In a sign of divide within the Tory Party, former culture secretary Nadine Dorries criticised her colleagues.

“I cannot imagine there’s one G7 country which thinks we’re worthy of a place at the table,” she tweeted.

“The removal of one electorally successful PM, the disgraceful plotting to remove another by those who didn’t get their way first time round is destabilising our economy and our reputation.”