London politics latest news LIVE: Jeremy Hunt held ‘meeting of minds’ with Andrew Bailey on economy

Bank of England Governor Andrew Bailey said he spoke to new Chancellor Jeremy Hunt on Friday and had a "meeting of minds" on the issue of "fiscal sustainability".

Taking questions in Washington, he said: "I can tell you that I spoke to Jeremy Hunt, the new Chancellor, yesterday. I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that."

He continued: “It’s not appropriate for me to constrain the choices he makes but the very clear message I would give and it is a clear message for everybody, including a clear message for markets. I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability.”

Earlier on Saturday, Mr Hunt warned there will be “difficult decisions” ahead on tax and spending.

Speaking to Sky News, Mr Hunt, twice a Tory leadership contender, wasted no time in criticising the mini-budget but endorsed the "fundamentals" of the push for growth.

He added: “Spending will not go up as much as people want and there’ll be more efficiencies to find and we won’t have the speed of tax cuts we’re hoping for, and some taxes will have to go up. That’s the reality of the very challenging situation we face.”

Although ruling out austerity-like cuts, Mr Hunt said the Government will need to made “very difficult decisions” following the fallout from the mini-Budget in order to restore stability.

Jeremy Hunt admits ‘mistakes have been made’

07:35 , Sami Quadri

Jeremy Hunt, who replaced Kwasi Kwarteng as Chancellor on Friday as Liz Truss sought to save her premiership, said that mistakes had been made by the Government.

He told Sky News: “There were mistakes. It was a mistake when we’re going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest.

“It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up.

“The Prime Minister’s recognised that, that’s why I’m here.”

Jeremy Hunt hints there will be tax rises

07:43 , Sami Quadri

Jeremy Hunt, the new Chancellor, indicated that tax rises could be coming as he seeks to balance the books and steady the markets after a disastrous few weeks for the Liz Truss administration.

He told Sky News: “We will have some very difficult decisions ahead. Spending will not rise by as much as people would like and all Government departments are going to have to find more efficiencies than they were planning to.”

“And some taxes will not be cut as quickly as people want.

“Some taxes will go up. So it’s going to be difficult. But as we take those difficult decisions, my priority, our values as a Government, will be to protect families, businesses, who are going through a very challenging time.”

Conservative MP John Redwood warns ‘you cannot tax your way to higher growth’

08:04 , Sami Quadri

Thatcherite Tory MP John Redwood offered an early warning to the new Chancellor Jeremy Hunt about his tax and spending plans.

Tweeting on Saturday morning, Mr Redwood said: “You cannot tax your way to higher growth. If you tax too much you end up borrowing more as you have a worse slowdown.”

Jeremy Hunt says predecessor made ‘two mistakes’

08:25 , Sami Quadri

Jeremy Hunt said his predecessor Kwasi Kwarteng made “two mistakes” as Chancellor.

Speaking on the BBC’s Today programme, he said it “was wrong” to cut the top rate of income tax for high earners and to announce those plans without a forecast from the Office for Budget Responsibility.

Chancellor indicates he has a ‘clean slate’ over the mini-Budget

08:37 , Bill Mcloughlin

Chancellor Jeremy Hunt signalled he will have a “clean slate” when it comes to the mini-budget.

Appearing on BBC Radio 4’s Today programme, he paid tribute to his predecessor Kwasi Kwarteng for the energy price guarantee.

But asked if he now has a “clean slate” on the mini-budget and if he could change elements of the plan, Mr Hunt said: “Yes. And the fundamental thing the Prime Minister wants me to do and I need to do is to be completely honest with the country.”

He said that he will meet with Treasury officials later on Saturday and with Liz Truss on Sunday.

Jeremy Hunt: Liz Truss has listened to the criticism of the mini-Budget

08:58 , Bill Mcloughlin

Jeremy Hunt insisted that Liz Truss had “listened” after the crisis sparked by her mini-budget, as the new Chancellor said that people do not want “more political instability”.

He told BBC Radio 4’s Today programme: “She has listened and I think you want a prime minister who’s prepared to listen in these situations and what she wants to do is to get the economy motoring in a way that protects families and businesses through a very difficult period.

“And I think the last thing people want now is more political instability.”

Tobias Ellwood says Hunt is a ‘wise inclusion’ to Government

10:23 , Sami Quadri

Senior MP Tobias Ellwood joined those welcoming the installation of Jeremy Hunt as Chancellor, as he indicated he has had the Conservative whip restored.

In a reference to his loss of the party whip after he failed to support the Government in a confidence vote during the summer while overseas, Mr Ellwood tweeted: “Glad to be off the (Odesa) naughty step & back in Pty as we enter this re-set.”

Mr Ellwood said Mr Hunt was a “wise inclusion” in the Government.

“We thrive when governing as ‘One Nation’ Tories harnessing a coalition of talent – solving economic crises via sound money & fiscal responsibility.”

Sir Keir Starmer accuses Truss of ‘grotesque chaos’

10:41 , Sami Quadri

Labour leader Sir Keir Starmer accused Liz Truss of “grotesque chaos” in the sacking of her chancellor Kwasi Kwarteng.

Giving a speech in Barnsley after a day of upheaval in Westminster, Sir Keir pointed to the “grotesque chaos of a Tory Prime Minister handing out redundancy notices to her own Chancellor”.

Sir Keir said there was “no historical precedent” for the current situation facing Liz Truss and her Government.

The Labour leader said: “There are no historical precedents for what they have done to our economy. Britain has faced financial crises before but the prime ministers and chancellors who wrestled with them all acted fast.

“When their policies ran against the rocks of reality, they took decisive action.

“But this lot, they didn’t just tank the British economy, they also clung on as they made the pound sink. Clung on as they took our pensions to the brink of collapse.

“Clung on as they pushed the mortgages and bills of the British public through the roof.

“They did all of this – all the pain our country faces now is down to them.”

Sir Keir Starmer calls for fiscal statement to be brought forward

11:39 , Sami Quadri

Asked whether the fiscal statement should be brought forward, Labour leader Sir Keir Starmer told the PA news agency: “Yes. The crisis we’re facing at the moment is a crisis made in Downing Street and the damage has already been done and is very, very hard to reverse – you can’t reverse out of a car crash.

“Changing your chancellor doesn’t undo the damage that’s already been done, so the statement needs to be brought forward, we need to reverse the kamikaze budget.

“But more than that, after 12 years of Tory failure we actually need a change of Government. Tinkering with the people at the top of the Tory party is not the change that we need at the moment.

“Sometimes this is the consequence of some awful world event, but this is self-inflicted, made in Downing Street, and everybody knows it.”

Miriam Margolyes swears on Radio 4 when talking about Jeremy Hunt

11:40 , Bill Mcloughlin

Miriam Margolyes has told how she wanted to swear at new Chancellor Jeremy Hunt when she met him in a BBC radio studio just a day after he took up his latest role in Government.

Read our story here.

Labour members feel party has a ‘real chance’ of winning next election

13:09 , Bill Mcloughlin

Labour members have said their party has "a real chance" of winning the next election as they accused the Conservatives of "snatching ideas out of the air".

Following Sir Keir Starmer’s speech on Saturday, Bradford councillor Shakeela Lal said Labour now had "a real chance" of winning the next election.

She told the PA news agency: "We've got to get to grips with the cost-of-living crisis.

"It's not going to be an easy solution. The country's in turmoil, the Tories are in crisis.

"From a Labour point of view (the mood is) positive, we've got a real chance so we can start repairing the damage."

Scottish Labour leader declares party ‘ready’ for general election

13:30 , Sami Quadri

Scottish Labour is ready for a general election, leader Anas Sarwar has said.

Speaking to BBC Radio Scotland’s Good Morning Scotland programme on Saturday, Mr Sarwar said the party is “not afraid” of an election, and the UK Government led by Liz Truss is at “the end of the road”.

His comments came as UK Labour leader Sir Keir Starmer said the UK needs a general election.

Backing his calls, Mr Sarwar said: “I think it’s clear Liz Truss is a lame duck Prime Minister. She’s Prime Minister just in name.

“Keir Starmer is absolutely right to demand a general election.

“He’s also right to highlight that we don’t want just this Government to lose, we want to deserve to win.”

New polling released on October 5 by YouGov showed Scottish Labour on 31% of the vote in a general election in Scotland – an increase of nine points.

Mr Sarwar, a Glasgow regional list MSP, said improving the polls has been his “focus” since he was elected leader following Richard Leonard’s departure in early 2021.

“That has been the focus that I’ve had since I’ve taken over this job 20 months ago, and Keir Starmer has had since he became leader of the UK Labour Party,” Mr Sarwar said.

“We both know the flaws of both the Scottish Government and the UK Government led by the SNP in Scotland, the Conservatives across the UK, so how are we going to make a positive case for why people should vote for us?

“I’m confident that if we can demonstrate to people that Labour can win the next election, Labour will win the next election.

“Then we can demonstrate to people how you will reform and change the UK, that means strengthen Scotland, bolster reform or renew the UK, and having governments of the people. And that can mean big gains for us across the country.”

Tory MP Tobias Ellwood has whip restored

13:32 , Sami Quadri

A senior Tory MP has had the whip restored after being suspended from his party for missing a confidence vote in the summer.

Tobias Ellwood, the chairman of the Commons Defence Committee, had the whip removed after he failed to vote for Boris Johnson’s Government in a confidence vote in July.

Mr Ellwood, a former minister, had argued he was unable to make it to the crucial vote as he struggled to travel back from a meeting with the president of Moldova.

At the time, he said he was “very sorry” he did not make it back to Parliament in time.

On Saturday, the Bournemouth East MP tweeted that he was glad “to be off the (Odesa) naughty step & back in Pty as we enter this re-set”.

‘Smartest decision’ Truss made was appointing Jeremy Hunt

13:40 , Sami Quadri

Lauren McEvatt, a former Conservative special adviser under David Cameron, said the “smartest decision” Liz Truss made was appointing Jeremy Hunt.

Ms McEvatt said: “The smartest decision that Liz Truss has made in her entire premiership was appointing Jeremy Hunt yesterday. Conversely, potentially the dumbest thing he has ever done was taking the job.”

She said Mr Hunt is an “adult” who understands what the job requires.

“What he said on the news this morning is very much a wholesale reversal of everything Liz Truss has tried to achieve over the course of the last several weeks,” Ms McEvatt added.

“Mentioning that there are going to have spending cuts, mentioning that there might have to be tax rises.

“This is exactly what the market needed to hear in order to work out how on Earth the government was going to fill the £60m gap that was left… after the mini-budget.”

Andrew Bailey warns of rise in interest rates

14:40 , Sami Quadri

The governor of the Bank of England had warned that “inflationary pressure” will likely require a “stronger response” than expected during a speech in Washington.

Speaking at the G30 annual international banking seminar, Andrew Bailey said: “The UK Government has made a number of fiscal announcements and has set October 31 as the date for a further fiscal statement.

He said that the Bank’s monetary policy committee “will respond to all this news at its next meeting in just under three weeks from now”.

“This is the correct sequence in my view. We will know the full scope of fiscal policy by then but I will repeat what I have said already: We will not hesitate to raise interest rates to meet the inflation target.

“And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August.”

Andrew Bailey warns UK financial markets have experienced ‘violent moves’

15:05 , Sami Quadri

The Governor of the Bank of England said financial markets in the UK have experienced “violent moves” in recent weeks.

In his speech in Washington, Andrew Bailey said: “UK financial markets have experienced some violent moves in the last few weeks particularly at the long-end of the Government debt market.

“This has put the spotlight on the flaws in the strategy and structure of one important part of a lot of pension funds.

“At the Bank of England we’ve had to intervene to deal with a threat to the stability of the financial system, our other core objective.

“There may appear to be a tension here between tightening monetary policy as we must, including so-called quantitative tightening, and buying government debt to ease a critical threat to financial stability.

“This explains why we have been clear that our interventions on the latter point are strictly temporary, and have been designed to do the minimum possible or necessary.”

Andrew Bailey had ‘meeting of minds’ with Chancellor

16:18 , Sami Quadri

Bank of England Governor Andrew Bailey said he spoke to new Chancellor Jeremy Hunt on Friday and had a “meeting of minds” on the issue of “fiscal sustainability”.

Taking questions in Washington, he said: “I can tell you that I spoke to Jeremy Hunt, the new Chancellor, yesterday. I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that.”

He continued: “It’s not appropriate for me to constrain the choices he makes but the very clear message I would give and it is a clear message for everybody, including a clear message for markets.

“I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability.”

Former PM pays tribute to Sir David Amess

16:26 , Sami Quadri

Former prime minister Boris Johnson joined in with tributes to Sir David Amess on the first anniversary of his murder.

Mr Johnson tweeted: “On this sad anniversary of the death of Sir David Amess we remember the many good things he stood for: campaigns for animal welfare, city status for Southend and independence for a sovereign parliamentary democracy. A legacy that shines bright.

“Thinking of Julia and the family.”

Andrew Bailey held ‘meeting of minds’ with new Chancellor

16:54 , Daniel Keane

Bank of England Governor Andrew Bailey said he spoke to new Chancellor Jeremy Hunt on Friday and had a "meeting of minds" on the issue of "fiscal sustainability".

Taking questions in Washington, he said: "I can tell you that I spoke to Jeremy Hunt, the new Chancellor, yesterday. I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that."

He continued: "It's not appropriate for me to constrain the choices he makes but the very clear message I would give and it is a clear message for everybody, including a clear message for markets.

"I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability."

Starmer pays tribute to David Amess

17:12 , Daniel Keane

Labour leader Sir Keir Starmer has paid tribute to Sir David Amess on the first anniversary of his death.

He wrote on Twitter: “Remembering our friend & colleague David Amess, on the 1st anniversary of his senseless death.

“David’s commitment to public service, carried out with inherent, consistent kindness, will forever be admired.

“Thinking of his wife & children, hoping memories of him bring comfort.”

Tensions between PM and Chancellor would ‘finish’ the Government, says peer

17:38 , Daniel Keane

Crossbench peer Lord Jim O'Neill said he presumed there would not be many "tensions" between Jeremy Hunt and the Prime Minister, because otherwise the Government is "finished".

The former chief economist at investment bank Goldman Sachs told BBC Radio 4's PM programme: "I can't imagine how the Prime Minister could afford to lose him quickly if she wanted to stay on herself.

"So in that sense, he's got a lot of influence but his dilemma is the backbenches of this peculiar era of the Conservative Party is just full of so many different factions and many of them will be put out by Jeremy's own history as evidenced by the fact he failed to become leader twice but also by what he implied now has to happen."

Hunt ‘may have been given carte blanche by desperate PM'

17:53 , Daniel Keane

Lord O’Neill suggested that Mr Hunt may have “only taken this job because he’s been given carte blanche by a desperate prime minister”.

He added: “But if it turns out to be the case, that that’s not at all true, then this Government is basically finished, because as soon as the markets get wind of that they will freak out even more than they did before.”

He suggested that the markets “might give them a bit of a chance” if the Government does enough to reassure them in coming days.

Jeremy Hunt: Who is the UK's new chancellor?

18:17 , Daniel Keane

Hunt ‘to delay 1p income tax cut’

18:40 , Daniel Keane

Chancellor Jeremy Hunt will delay a 1p cut in income tax as he seeks to reduce the deficit, according to reports.

Mr Hunt is expected to announce that the cut, one of the flagship policies of the Prime Minister’s “mini budget”, will be delayed until next year.

The Sunday Times report that the cut to 19 per cent will now take effect at the time previously proposed by Rishi Sunak, the former chancellor.

Watch: Sir Keir Starmer says PM ‘clinging on'

20:15 , Daniel Keane

That’s all from us

21:25 , Daniel Keane

Thank you for following our live coverage today.

Liberal Democrat leader calls for general election

Sunday 16 October 2022 07:33 , Sami Quadri

Liberal Democrat leader Sir Ed Davey called for a general election.

He said the problem is not just Prime Minister Liz Truss and the Government, but the “whole” Conservative Party.

“They can’t agree and therefore I think they all need to go,” he told BBC Breakfast.

He admitted that, given the state of the polls, it is unlikely that the Tories will do the “right thing” and hold an election.

But he said “the damage is already done” to the UK economy, in the wake of the mini-budget.

Sir Ed said the appointment of Jeremy Hunt as Chancellor has not gone far enough in reversing the mini-budget.

“The Government seemed completely out of touch. I think they’re just taking people for granted,” he said.

“And let’s hope we get a Budget that improves things, but I’m afraid I feel a lot of the damage has already been done.”

Labour launches new attacks on Tories as party gears up for election

Sunday 16 October 2022 08:08 , Sami Quadri

The Labour Party has launched a series of scathing new adverts attacking the Conservatives as it gears up for the next general election.

In four scathing posters, Labour attacks the Conservatives for damaging the UK’s standing on the world stage, hiking mortgages and crashing the economy.

It comes after a disastrous week for Prime Minister Liz Truss, whose authority has been left severely damaged by her decision to sack chancellor Kwasi Kwarteng and U-turn on planned tax cuts.

The new posters have been drawn up by Labour’s advertising agency Lucky Generals.