Liz Truss’s cabinet is to be asked to find “efficiency savings” in Whitehall budgets, Sky News understands, putting huge pressure on frontline services.
During the leadership contest, Ms Truss said that she was “not planning public spending reductions”.
Now the Treasury is expected to send out a letter within hours to secretaries of state insisting that departments find savings where possible and live within existing budgets.
This is to reduce the level of government borrowing needed in future, in a bid to calm the market turmoil.
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Treasury’s financial secretary said the government won’t take responsibility for the financial storm hitting the UK following the chancellor’s mini-budget.
The move comes as Kwasi Kwarteng is putting together a plan to show the markets that he can bring spiralling borrowing under control after the market turmoil.
Double-digit inflation will leave frontline services under huge pressure, but the letter will make clear there is no money left to help ease the situation.
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On top of real-term cuts, additional efficiency savings will be demanded by the Treasury putting budgets under the biggest pressure since Theresa May reversed the austerity policy of the Cameron-Osborne years.
Chris Philp, the chief secretary to the Treasury, will send the letter, alongside a second letter from the prime minister outlining her priorities in government.
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In July, Ms Truss said: “I’m very clear I’m not planning public spending reductions, what I am planning is public service reforms.
“I’m certainly not talking about public spending cuts, what I’m talking about is raising growth.
“I want people to be able to keep hold of their own money, but we’ll also have more money to spend on our public services over the long term.”
A 13-year-old girl has been charged with three counts of attempted murder after two teachers and a pupil were stabbed at a school.
The three people were treated in hospital for stab wounds but have now been released.
Pupils at Amman Valley School, also known as Ysgol Dyffryn Aman, went into lockdown just after 11.20am on Wednesday following the attack at the end of morning break in Carmarthenshire.
Amman Valley School, which is in the town of Ammanford, is a comprehensive with around 1,500 students aged between 11 and 18.
In a statement on the school’s website, headteacher James Durbridge said on Wednesday it had been a “very difficult day” for the school.
“It goes without saying that my thoughts are with the three individuals and their families, who have been affected by today’s incident,” he said.
“I wish to commend all staff and pupils for their calm and mature response during today’s lockdown.
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“We are proud to have witnessed pupils embodying the school’s core values while supporting their peers and staff.”
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Meanwhile, a 15-year-old boy has been arrested and remains in custody on suspicion of making threats referencing the school attack, Dyfed-Powys Police has said.
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Superintendent Ross Evans said: “Following [the stabbing incident], yesterday evening our control room received a number of calls reporting concerns about messages being shared on social media which had references to the incident here at Ysgol Dyffryn Aman.
“Officers swiftly carried out a warrant at the home of the person believed to be responsible for this content and a 15-year-old male has been arrested.
“He also remains in police custody while we investigate these allegations.”
Two horses which bolted and charged through central London are in a “serious condition”, a minister has said.
The Household Cavalry said the animals – which were taking part in what the Army called a “routine exercise” in the Belgravia area on Wednesday – were spooked by builders dropping rubble from a height “right next to them”.
Defence minister James Cartlidge told Sky News on Thursday morning: “There were five horses. They have all been recovered.
“Three of them are fine, two of them are unfortunately in a relatively serious condition and obviously we will be monitoring that condition.”
He added: “They are in a serious condition, but as I understand, still alive.”
The minister also confirmed the names of the two animals, Vida and Quaker.
“This is extremely unlikely, this scenario,” he told LBC.
“Unfortunately we have seen what has happened, but all I can say is the crucial thing… no serious injuries to the public as far as we aware, and of course we will be keeping an eye on the situation.”
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Four service personnel were thrown from their horses and the animals that ran loose smashed into vehicles, including a taxi and a tour bus.
Paramedics treated four people in three separate incidents in Buckingham Palace Road, Belgrave Square, and at the junction of Chancery Lane and Fleet Street, in the space of just 10 minutes.
Some of the soldiers were taken to hospital for treatment for their injuries, which were not thought to be serious.
One witness got off a bus and described seeing two horses, one black and the other white, “flying past”.
“The white one was drenched in blood from the chest down and they were galloping through the traffic at speed,” she said.
“People were stopping in the street shocked. The horses were running into fast-moving traffic and seemed terrified. Some unmarked police cars were chasing after them, which didn’t seem to be helping.
“I felt shocked. It was pretty gruesome. Felt like a weird dream.”
The horses were eventually recaptured by City of London Police and taken away to be assessed by Army vets.
The animals are all receiving care from vets at Hyde Park barracks.
Commanding Officer of the Household Cavalry Mounted Regiment Lieutenant Colonel Matt Woodward said in a video statement posted on X the unit exercises around 150 horses on the roads and in parks every morning, partly to help desensitise them to city noise.
He said the “shock” of building materials being dropped from a height near them caused the horses to bolt and unseat some riders
He added: “Thankfully, considering the frequency of exercise and numbers of horses involved, this type of incident is extremely rare, we continue to strive to minimise the risk of this recurring.
“As ever we are grateful for due consideration given by the members of the public to not making loud noises around our horses.”
When temperatures hit nearly 22C in parts of England earlier this month, people might have thought that spring had finally sprung.
But with May fast approaching, temperatures have suddenly dropped, forcing some back into their winter coats and others to switch the heating on once again.
So what has caused the mercury to drop to near-freezing in some parts?
According to Sky News weather presenter Jo Wheeler, an area of high pressure to the west of the UK is behind it.
“High pressure to the west of the UK and Ireland gave hopes for a few days of settled weather, even though it was forecast to be a ‘cloudy high’,” she says.
“And that is pretty much what we have seen, although the positioning of the high brought cold northerly winds – and eastern counties can vouch for this.
“The high was also weak enough to allow frontal systems (a collision of cold and warm air) to move through it, so we didn’t see entirely dry weather either.
“And, winds were strong enough to give a significant wind chill along the North Sea coasts, which was pretty bitter.”
However, the next few days could still be relatively cold, particularly overnight on Friday and potentially Saturday, when temperatures in parts of northern and eastern England could drop to near or even below freezing, according to the Met Office.
And while they say temperatures are likely to “trend upwards” from Sunday, rain and cloudier weather is set to dominate next week, particularly in the south.
According to the Met Office’s forecast for next week, there will be drier weather in northern parts of the UK and a chance of rain or even thundery showers for a time in the east.
“Temperatures [are] likely to trend upwards, with the chance of a warm to very warm spell in some southern and eastern parts, before conditions probably turn drier, cooler and more settled from the west towards the end of the period,” they say.