“The governor of the Bank of England has warned that its emergency intervention in the UK’s debt markets will come to an end on Friday despite concerns about the nation’s financial stability. The comments by Andrew Bailey last night will lead to fears of further turmoil in the markets in coming days amid warnings that pension funds, which are heavily invested in UK government debt, face a “cliff-edge”. They were said to be on the brink of collapse before the Bank’s intervention in the wake of Kwasi Kwarteng’s mini-budget, which included £45 billion of unfunded tax cuts. Bailey yesterday told pension funds that were urging him to extend the deadline for the Bank’s multibillion-pound government debt-buying programme they had three days to prepare for it to end.” – The Times

The Bank of England has signalled privately to bankers that it could extend its emergency bond-buying programme past this Friday’s deadline, according to people briefed on the discussions, even as Governor Andrew Bailey warned pension funds that they “have three days left” before the support ends. Bailey’s comments late on Tuesday came as pension funds raced to shore up their derivative strategies before Friday’s “cliff edge”. The industry has said it needs more time to avoid a repeat of the forced selling that prompted the BoE to launch the emergency support scheme…Representatives from the central bank informed some lenders on Tuesday that it was prepared to extend the facility past the October 14 end date if market conditions demanded it…” – The Financial Times

“The economy shrank unexpectedly in August as the cost of living crisis and soaring inflation continue to bite, new official figures show. GDP slumped by 0.3 per cent in August, according to the Office for National Statistics (ONS), with the latest data showing that the UK economy fell by 0.3 per cent across the three months to August. ONS chief economist Grant Fitzner said production and services fell back in August, with July’s growth figure revised downwards. Mr Fitzner said: “Oil and gas production fell as more scheduled North Sea summer maintenance took place than usual. “Notable decreases were also seen across much of manufacturing. Health also contributed to the decline, with a drop in the number of hospital consultations and operations.”” – The I

“Liz Truss today told Cabinet ministers that Britain’s post-Covid economic challenge is bigger than the one faced by the country after the 2008 financial crisis. It emerged the Prime Minister issued the warning to her top ministers as they gathered in Downing Street for the first time since last week’s…Conservative conference. In an account of this morning’s…meeting, Ms Truss was said to have defended the Government’s decision to cut taxes in last month’s mini-Budget as well as freeze energy bills for households and businesses. In the wake of bitter Tory infighting at their Birmingham conference, the PM was also reported to have told ministers to instead focus on attacking Labour as part of the ‘anti-growth coalition’ she outlined in her conference speech last week.” – The Daily Mail

“Liz Truss was challenged in the Cabinet over benefits, with four ministers understood to be backing a rise in line with inflation. The Prime Minister wants to cut benefits in real terms by linking next year’s rise to earnings growth rather than inflation, saving £7 billion a year. However, four Cabinet ministers – Chloe Smith, the Work and Pensions Secretary; Penny Mordaunt, the Leader of the Commons; Sir Robert Buckland, the Welsh Secretary; and Jacob Rees-Mogg, the Business Secretary – have spoken out against the plan. On Tuesday morning, the issue of benefits uprating was raised during…Cabinet. It was understood that Ms Smith presented her argument that she believed the Government should be doing all it can to protect the vulnerable.” – The Daily Telegraph

“The prime minister has been forced to delay the start of her “Operation Rolling Thunder” blitz of pro-growth reforms after failing to agree a deregulation plan with Jacob Rees-Mogg…Planning reforms have also been pushed back until next month, in a sign of disarray… She had been planning to set out changes to workers’ rights today to kick-start a series of at least six “supply side” reforms designed to spur economic growth and convince the markets and the spending watchdog of the credibility of her plans. However, the announcement has been delayed after Truss rejected the most radical measures put forward by Rees-Mogg and could not find alternative policies that would plausibly boost growth significantly.” – The Times

“China will be declared an official “threat” in a new strategic review of Britain’s enemies, The Sun can reveal. Ex-PM Boris Johnson’s landmark 2021 Integrated Defence and Security Review classed China a “systemic competitor” but stopped short of saying they were actively hostile to the UK. But now Liz Truss is preparing to toughen that stance after announcing a review of the policy last month. Earlier today, top spook Sir Jeremy Fleming said: “China’s great strength combined with fear is driving them into actions that could represent a huge threat to us all.”…The boss of government listening agency GCHQ added: “They see nations as either potential adversaries or potential client states, to be threatened, bribed, or coerced.”” – The Sun

“Chancellor Kwasi Kwarteng is facing Tory opposition to proposals to save £5bn a year from Britain’s overseas aid budget, as he begins…filling in a fiscal hole estimated at up to £60bn. Cutting UK public spending in the developing world is…one of the less fraught options facing Kwarteng, as he attempts to prove to financial markets that he has a plan to bring UK government debt under control. One former cabinet minister said Kwarteng’s £43bn of unfunded tax cuts and the implied spending reductions…were “economically reckless and politically suicidal”…The chancellor’s “mini” Budget on September 23 unleashed turmoil on markets that has sent government borrowing costs soaring and resulted in a collapse in the poll ratings of Liz Truss and her administration.” – The Financial Times

“A senior Tory MP has warned Kwasi Kwarteng that his medium fiscal plan may not pass through the Commons, in a sign that the Government’s bold economic plan is still not popular among Tory MPs. Mel Stride, the Tory chair of the Commons Treasury committee, said that while he welcomed the Chancellor’s decision to move the publication of his medium fiscal plan and the OBR forecast to the end of the month, Mr Kwarteng must be confident that it will pass through the Commons. The prominent Tory MP urged ministers to reach out to backbenchers to ensure the measures have support as he warned that failing to get them through Parliament will “unsettle the markets”.” – The I

“Kwasi Kwarteng’s tax cutting mini-Budget will help Britain to be the fastest growing major economy this year despite pushing up inflation, the International Monetary Fund (IMF) has said. UK economic growth will outpace the rest of the G7 in 2022, the IMF said, with tax cuts announced by the Chancellor expected to lift growth even higher than its current forecast of 3.6pc…The IMF repeated these concerns even as it admitted the plan would push up growth. It expects inflation to remain at 9pc next year – the worst rate for any major advanced economy – and said Mr Kwarteng’s tax policies will push up the cost of Government borrowing unless he changes course.” – The Daily Telegraph

“If you want to see the future of the NHS, you can find it nestled somewhere between a Burger King and a Claire’s Accessories in a north London shopping mall. The new Community Diagnostics Centre I opened in Wood Green is one of 89 CDCs already in operation across the country – and I have also approved 10 more. These are one-stop shops that your GP can refer you to for everything from blood tests to X-rays. They are being rolled out to bust the Covid backlogs and get people diagnosed quicker. Our CDCs have already run two million additional tests, checks and scans in little more than a year. Seeing the new centres open their doors has been a reminder of some of my own experiences using the NHS.” – Daily Express

“Liz Truss’s flagship trade deal with India is on the “verge of collapse” after Indian ministers reacted furiously to comments by Suella Braverman criticising migrants from their country. Last week the home secretary said she had “concerns” about the trade deal because it would increase migration to the UK and Indians represented the largest group of visa overstayers. She told The Spectator magazine: “I do have some reservations. Look at migration in this country — the largest group of people who overstay are Indian migrants.” The comments sparked a furious reaction from Indian government ministers and officials, sources from both governments have told The Times. A source in Delhi said they were “shocked and disappointed” by the “disrespectful” remarks.” – The Times

“The Home Secretary will demand British boots on French beaches to stop boat crossings getting to Britain. Suella Braverman wants to use a new £50million deal with Macron to get them to accept our UK border force staff and cops to patrol across the Channel as part of a new cash deal. Former Home Sec Priti Patel had previously offered up our guards and coppers to help beef up their Channel patrols in a bid to stop the boats – but the offer was rebuffed by France. But ministers are preparing to make the case again as the number of crossings continues to soar – and hope that under the new PM they can make real progress. It came as another 539 migrants crossed the Channel in small boats to Britain on Monday – and the daily total topped 1,000 four days in the last seven weeks.” – The Sun

“Transgender prisoners with male genitalia should no longer be held in women’s jails, the Justice Secretary has announced. The reforms to policies on where to house inmates will also apply to transgender women who have been convicted of a sex offence, Brandon Lewis…It comes after he told delegates at the Conservative Party conference last week: ‘It cannot be right that transgender prisoners, when convicted of serious sexual offences or those who have not had reassignment surgery, are housed in a general women’s estate. ‘This will end – we have a duty of care to all those behind bars. One case of a sex attack or an inappropriate relationship formed with a female prisoner by a transgender inmate is one too many and we’ve had too many in recent years.’” – The Daily Mail

 “Low-carbon electricity generators, which have benefited from high wholesale power prices, will face a de facto windfall tax aimed at raising “billions of pounds” when it comes into force at the start of next year, the UK government has confirmed. The decision to impose a revenue cap on companies in England and Wales that generate power from onshore wind, solar, biomass and nuclear comes after ministers failed to secure a voluntary agreement with them to sign 15-year, fixed-priced contracts. The government late on Tuesday confirmed the move, first reported by the Financial Times, although without fixing most of the important details, including the level of the cap, which it said would be subject to further consultation.” – The Financial Times

“Boris Johnson could be called within weeks to give evidence at the inquiry into whether he misled parliament. The investigation by the privileges committee into the former prime minister’s statements in the House of Commons concerning the Downing Street parties during lockdown will begin hearing evidence soon and almost certainly before the end of next month. Some of the MPs on the committee believe that Johnson should be the first person called to give evidence, although it is understood that no decision has yet been agreed on the sequence of the hearings. The evidence is expected to be heard in public, potentially causing significant embarrassment for Johnson as he is forced to explain his conduct during the affair.” – The Times

Michael Gove has urged Liz Truss to “keep faith” with Boris Johnson’s commitment to ending no-fault evictions amid concerns that she is poised to scrap the plans. The Times disclosed yesterday that Truss is planning…drop the plans entirely because they are not considered a priority…Speaking at the Conservative Party conference last week, Gove said that Johnson had given his “explicit insistence” that the measure should be included in the 2019 manifesto. No-fault evictions, known as section 21 notices, enable landlords to evict tenants without giving a reason or establishing “fault” on the part of the tenant. Speaking at an event hosted by Shelter, Gove said that the government must “level the playing field” between landlords and tenants.” – The Times

“Keir Starmer has announced a major shake-up of his political team, including the departure of his chief of staff, Sam White, saying Labour is now on an election footing. Boosted by…a string of hefty leads in opinion polls, Starmer said the party needed to move into…election readiness. In a call with party staff, Starmer said: “We are turning the page to the final act of opposition: driving the Labour party into government. It’s going to get harder as we get closer. But imagine how good it’s going to feel when we complete it. We can achieve what people said was unachievable.” Labour HQ will now oversee key parts of the party operation including communications and policy development in order to hone its messaging and manifesto offer.” – The Guardian

“Nicola Sturgeon has the power to hold an “entirely advisory” Scottish independence referendum as it would have no legal effect on the Union, her most senior law officer told the Supreme Court. Dorothy Bain KC, the Lord Advocate, said the vote proposed by the First Minister would be “non self-executing”, as a “yes” vote would not break up the United Kingdom by itself. Speaking on the first morning of a two-day hearing at the Supreme Court, she said the legislation that led to the 2014 independence and 2016 Brexit referendums did not impose legal obligations for their outcomes to be implemented. “A non self-executing referendum invariably has political consequences, but in law, it has no effect. They are entirely advisory,” she said.” – The Daily Telegraph