Pound UK economy latest: Truss admits ‘disruption’ in markets as S&P downgrades UK outlook

Liz Truss has admitted her chancellor Kwasi Kwarteng’s mini-Budget caused “disruption” as she vowed to “do things differently” from previous Conservatives leaders.

As Tories prepare for their annual conference, the prime minister warned the country faced a “difficult winter” ahead as she made clear she had no plans to change course her radical, borrowing-fuelled 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,” the PM told broadcasters on Friday – pointing to the cap on the cost per unit of energy.

RMT general secretary Mick Lynch has apologised to the public including participants of the London Marathon as they face transport difficulties because of rail strikes.

Speaking to BBC Breakfast, Mr Lynch said the union did not want to inconvenience people but warned it was the government who had brought the dispute on.

Asked whether he would apologise to the public, he said: “Absolutely. We don’t want to inconvenience the public and we’re really sorry that that’s happening.

“But the government has brought this dispute on. They (put) the challenges down to us, to cut our jobs, to cut our pensions and to cut our wages against inflation.”

Mr Lynch said that he had spoken with new Transport Secretary Anne-Marie Trevelyan, who seemed “very pleasant,” but added what was needed was a change of attitude at the negotiating table.

He added: “Grant Shapps was not allowing a compromise, so I hope there’s a change of mood and a change of stance.”

Welsh secretary Robert Buckland admitted there had been “some turbulence” in the markets this week – but insisted the government would stick with the plan to “incentivise growth”.

With economists and union leaders warning a return to austerity, the cabinet minister suggested public spending cuts were on the way, Adam Forrest writes.

“We intend to be extremely rigorous when it comes to bearing down on public expenditure,” Buckland told Sky News – saying there would be announcements on spending in the weeks ahead.

The minister said the government wanted to reassure market to “will be seeking to balance the books in a sensible way” departments as “efficient and as lean as possible”.

The Green Party has called for an emergency £75 billion tax package targeting polluters and the country’s wealthiest individuals, to fund a nationwide insulation and renewable energy programme.

At the party’s annual conference in Harrogate, co-leader Carla Denyer called for a new wealth tax on the richest 1% of households – starting with a marginal rate of 1% on those with £3.4 million, rising to 10% on those with £18.2 million and above.

She said there should be a “dirty profits tax” on North Sea oil and gas which would be used as a stepping stone towards a permanent carbon tax on polluting industries.

Families have been urged to take a photograph of their meter reading and do what they can to cut their energy use as prices spike from Saturday.

The amount that a household pays for each kilowatt hour of electricity it uses has risen to 34p from the already record 28p that families pay.

Gas prices are going from 7p to 10p per kilowatt hour under the new price cap.

It means that the typical household in the UK will spend around £2,500 on its energy bills – but those that use a lot of gas and electricity will naturally pay more.

Just a year earlier, gas had cost 4p per kilowatt hour for customers on the price cap and the charge for electricity was 21p.

The chancellor has defended his mini-budget by saying the government “had no other choice” than to do “something different” to spark the economy.

As the prime minister admitted the strategy had caused “disruption”, Kwasi Kwarteng said the public expected public spending would be tightly controlled.

“The British taxpayer expects their government to work as efficiently and effectively as possible, and we will deliver on that expectation,” he wrote in The Daily Telegraph.

“Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice.”

“One way of assessing the scale of the task facing Liz Truss at next week’s Conservative Party conference is to imagine drafting her speech for her.”

Sean O’Grady ponders what the PM might try in Birmingham.

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.

“So, Kwasi Kwarteng was warned. I have it on the highest, unimpeachable authority that the chancellor was told ahead of his tax-cutting measures that the markets would react badly.

Kwarteng apparently did not care, saying he was relaxed about the response. It’s bizarre, doesn’t make sense: a chancellor who apparently believes he is somehow impervious, on a mission, and hang the opposition.”

As the government’s energy bill cap kicks in, Business Secretary Jacob Rees-Mogg has asked the public to stay alert to scams.

“Unprecedented government support is beginning this weekend, protecting families and businesses across the country from what was going to be an 80% increase in energy bills this winter,” he said.

“I also urge people today to stay alert to scams. This support will reach people automatically and there is no need to apply.”