Pound UK economy latest: Liz Truss tells public to expect economic ‘disruption in the short term’

UK and EU officials will “meet soon” following a call on Friday between the foreign secretary and the EC’s Maros Sefcovic to discuss the Northern Ireland Protocol.

The Foreign Secretary had his first call with the European Commission vice president, amid an ongoing row over post-Brexit arrangements in Northern Ireland.

Talks have stalled in recent months and relations between London and Brussels remain at a low ebb, after the Government angered the EU with plans to rip up swathes of the protocol in a bid to address the concerns of unionists in Northern Ireland.

In a tweet following the call, Mr Sefcovic said that “teams will meet soon”, raising hopes in some quarters for progress in talks between the two sides.

Mr Sefcovic called it a “good conversation”, adding: “Both sides agree to look for solutions around the Protocol, to bring predictability & certainty to people in Northern Ireland.”

He said that the EU is “committed to joint efforts”, adding: “Teams will meet soon. James & I will stay in contact.”

Mr Cleverly, who has only been in the role a matter of weeks, offered similarly warm words after the call, which is understood to have included discussions about both the protocol and other issues.

Another call between them could be held again in a couple of weeks.

More than 100,000 people have signed a government petition calling for an immediate general election “to end the chaos of the current government”.

The number of signatures means the threshold needed for the motion to be considered for a debate in parliament has now been passed.

The petition was launched before Kwasi Kwarteng’s mini-Budget on Friday, which subsequently prompted the pound to drop to a record low against the dollar, causing a rare intervention from the IMF and the Bank of England.

My colleague Thomas Kingsley reports:

The government’s energy price cap to shield households and businesses from the worst of the impact of soaring oil and gas prices comes into effect on Saturday.

Under the energy price guarantee – which limits the unit price paid for electricity and gas – means the annual bill for a typical household in England, Scotland and Wales will be held to around £2,500 for the next two years.

A similar scheme will operate in Northern Ireland.

The government has said that without action, energy bills had been expected to hit £3,500 from October rising as high as £6,500 next year.

Households will also see the first instalment of the £400 energy bill support scheme in their October electricity bill. The discount will be automatically applied monthly in six instalments between October and March 2023.

Businesses, charities and public sector organisations will also be protected over the next six months.

Liz Truss said: “Livelihoods and businesses were at stake. The Government’s energy support limits the price they pay for gas and electricity, shields them from massive bill increases, and is expected to curb inflation too.

“The cost of not acting would have been enormous.”

Prime minister Liz Truss has said that her economic plan involves “disruption” in the short term.

Writing in The Sun, Ms Truss pledged to “do things differently”.

She said: “We need to get things done in this country more quickly. So I am going to do things differently. It involves difficult decisions and does involve disruption in the short term.”

“Not everyone will like what we are doing,” she continued, “But I want to reassure the public that the government has a clear plan that I believe is right for the country.”

Echoing her chancellor’s piece in the Daily Telegraph, Ms Truss said: “Next month we will set out how we will get debt down in the medium term.”

Tory MPs are reportedly in talks with the Labour Party to defeat certain parts of Kwasi Kwarteng’s mini-Budget.

Rebels are apparently in talks with the opposition to make sure that the government’s controversial new measures are brought to a vote in the House of Commons.

Conservative MPs are particularly angry about the plan to abolish the 45p top rate of income tax, LBC and The Times have reported.

My colleague Holly Bancroft reports:

An expert watchdog’s verdict on the tax-slashing mini-Budget will be kept secret for nearly two months after the chancellor refused to publish it.

Kwasi Kwarteng is defying calls, including from Conservative MPs, to reassure markets by revealing the official forecast of how his dash for growth will affect the economy.

After an unprecedented emergency Downing Street meeting on Friday, the Office for Budget Responsibility (OBR) said its initial findings would be on the chancellor’s desk within a week.

Our deputy political editor Rob Merrick has more:

The S&P ratings on the UK has now changed their outlook from stable to negative this evening.

The change comes as a result of the new government’s mini-Budget, as they calculated the government’s deficit will widen by an average 2.6 per cent of GDP annually through 2025.

The S&P said: “We have revised our outlook on the UK to negative from stable and affirmed the ‘AA/ A+’ ratings.”

Liz Truss has admitted chancellor Kwasi Kwarteng’s mini-budget caused “disruption” but insisted they were right to act to get the economy moving and to protect families from soaring energy bills.

As Tories prepared to head to Birmingham for their annual conference, the Prime Minister warned the country faced a “difficult winter” ahead as she indicated she had no plans to reverse her tax-cutting agenda.

“I recognise there has been disruption but it was really, really important we were able to get help to families as soon as possible,” she said in a pooled interview with broadcasters on Friday.

“This is going to be a difficult winter and I am determined to do all I can to help families and help the economy at this time.”

Her comments came at the end of a tumultuous week which saw the pound slump to an all-time low against the dollar and the Bank of England forced to spend billions buying up government debt to prevent a collapse of the pensions industry.

Levelling up secretary Simon Clarke has admitted it has been an “uncomfortable week” for the government, but said prime minister Liz Truss is “astonishingly resilient” and is “doing what she believes is right”.

An an interview with The Times, Mr Clarke said: “If I was to describe one word for Liz at the moment it is purposeful. She knew, and this was certainly something we discussed during the summer, that this would not be a comfortable process.

“(She knew) particularly early on, there would be real potential unpopularity to be courted in seeking to say things and do things, which weren’t going to be easy or quick wins. Frankly, she is doing what she believes is right. And I think she’s enjoying having the chance to do that.

“She’s obviously, you know, carrying pressures, which most of us would find pretty crushing. But she’s clear in her own mind and her conscience is clear that this is the right thing to do.”

A Tory MP has come under fire over an extraordinary claim that the Commons sleaze watchdog is seeking a peerage in return for letting corrupt MPs off the hook.

Conservative Andrew Bridgen challenged Parliamentary Standards Commissioner Kathryn Stone over the matter in an email.

The Leicestershire North West MP told Ms Stone two weeks ago he was “distressed” to have heard there were “advanced plans” to ennoble her for reaching “the right outcomes” in political corruption inquiries.