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Chancellor Kwasi Kwarteng is due to meet bankers today in an effort to calm nerves after his mini-budget spooked the markets and sent the pound crashing.

Sky News understands he will ask financiers not to bet against the pound, which has fallen to record lows against the dollar in recent days.

He is also expected to underline his commitment to fiscal discipline and will talk about a “Big Bang 2.0 event” from his growth plan.

Politics live: Kwarteng holds call with nervous Tory MPs

The government has denied he will be asking bankers not to short the pound.

The chancellor is facing international pressure to change course after he unveiled the biggest programme of tax cuts for 50 years in his mini-budget last Friday.

In an extraordinary statement on Tuesday, the International Monetary Fund (IMF) said it was “closely monitoring” developments in the UK and urged Mr Kwarteng to “re-evaluate the tax measures”.

More on Kwasi Kwarteng

It said that the plans, including the abolition of the 45p rate of income tax for people earning more than £150,000, are likely to increase inequality.

The Bank of England (BoE) has signalled it was ready to significantly ramp up interest rates to shore up the pound and guard against increased inflation.

The chancellor has insisted he is “confident” his strategy will deliver the promised economic growth.

Last night he spoke by phone to Tory MPs at a time of growing anger on the backbenches over the government’s strategy.

IMF hits out at mini-budget – live updates.

Some have been openly expressing concerns about the new economic approach, and the effect it has had on financial markets, saying the party risks trashing its reputation for managing the economy with voters.

Veteran Conservative MP Sir Roger Gale says that another financial crash may be on the way.

Speaking to Good Morning Britain, he said the situation amounts to a “perfect storm”.

He added: “I’m sadly old enough to remember the last financial crash.

“When… people would come into the surgery in tears because they were losing homes and they were losing businesses.

“It was not a pretty sight and I don’t want to see it happen again.”

Chancellor defends budget in phone call with Tory MPs

Sky News understands that the chancellor stood by his decision to cut taxes for the highest earners on his call yesterday, telling MPs “it was a tough choice but the right choice”.

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Sky’s economics and data editor Ed Conway takes a look at the most recent numbers on the pound’s volatility.

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‘End of NHS’ if chancellor doesn’t reverse mini-budget

He argued his fiscal strategy was focused on the medium-term, and was aimed at showing voters “we can be more efficient in how we spend taxpayers’ money”.

He went on to say that the economic situation would be better in 2024, before what he said was always going to be a “tricky” general election – with Labour currently surging ahead in the polls.

He told MPs that he was establishing a “good working relationship” with the governor of the Bank of England and was in daily contact with him.

He also acknowledged that markets had been volatile but said they were now “settling down” and argued the turmoil reflected a frustration that the markets had not known everything that was included in the mini-budget.

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Chancellor’s Mansion House speech vows to rip up red tape – saying post-financial crash rules went ‘too far’

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Chancellor's Mansion House speech vows to rip up red tape - saying post-financial crash rules went 'too far'

Chancellor Rachel Reeves has criticised post-financial crash regulation, saying it has “gone too far” – setting a course for cutting red tape in her first speech to Britain’s most important gathering of financiers and business leaders.

Increased rules on lenders that followed the 2008 crisis have had “unintended consequences”, Ms Reeves will say in her Mansion House address to industry and the City of London’s lord mayor.

“The UK has been regulating for risk, but not regulating for growth,” she will say.

It cannot be taken for granted that the UK will remain a global financial centre, she is expected to add.

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It’s anticipated Ms Reeves will on Thursday announce “growth-focused remits” for financial regulators and next year publish the first strategy for financial services growth and competitiveness.

Rachel Reeves
Image:
Rachel Reeves


Bank governor to point out ‘consequences’ of Brexit

Also at the Mansion House dinner the governor of the Bank of England Andrew Bailey will say the UK economy is bigger than we think because we’re not measuring it properly.

A new measure to be used by the Office for National Statistics (ONS) – which will include the value of data – will probably be “worth a per cent or two on GDP”. GDP is a key way of tracking economic growth and counts the value of everything produced.

Brexit has reduced the level of goods coming into the UK, Mr Bailey will also say, and the government must be alert to and welcome opportunities to rebuild relations.

Mr Bailey will caveat he takes no position on “Brexit per se” but does have to point out its consequences.

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Bailey: Inflation expected to rise

In what appears to be a reference to the debate around UK immigration policy, Mr Bailey will also say the UK’s ageing population means there are fewer workers, which should be included in the discussion.

The greying labour force “makes the productivity and investment issue all the more important”.

“I will also say this: when we think about broad policy on labour supply, the economic arguments must feature in the debate,” he’s due to add.

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The exact numbers of people at work are unknown in part due to fewer people answering the phone when the ONS call.

Mr Bailey described this as “a substantial problem”.

He will say: “I do struggle to explain when my fellow [central bank] governors ask me why the British are particularly bad at this. The Bank, alongside other users, including the Treasury, continue to engage with the ONS on efforts to tackle these problems and improve the quality of UK labour market data.”

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Reeves has welcome support from Bank’s governor as she goes for growth and seeks to woo City

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Reeves has welcome support from Bank's governor as she goes for growth and seeks to woo City

When Gordon Brown delivered his first Mansion House speech as chancellor he caused a stir by doing so in a lounge suit, rather than the white tie and tails demanded by convention.

Some 27 years later Rachel Reeves is the first chancellor who would have not drawn a second glance had they addressed the City establishment in a dress.

As the first woman in the 800-year history of her office, Ms Reeves’s tenure will be littered with reminders of her significance, but few will be as symbolic as a dinner that is a fixture of the financial calendar.

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Her host at Mansion House, asset manager Alastair King, is the 694th man out of 696 Lord Mayors of London. The other guest speaker, Bank of England governor Andrew Bailey, leads an institution that is yet to be entrusted to a woman.

Ms Reeves’s speech indicates she wants to lean away from convention in policy as well as in person.

By committing to tilting financial regulation in favour of growth rather than risk aversion, she is going against the grain of the post-financial crash environment.

“This sector is the crown jewel in our economy,” she will tell her audience – many of whom will have been central players in the 2007-08 collapse.

Sending a message that they will be less tightly bound in future is not natural territory for a Labour chancellor.

Her motivation may be more practical than political. A tax-and-spend budget that hit business harder than forewarned has put her economic program on notice and she badly needs the growth elements to deliver.

Britain's Chancellor of the Exchequer Rachel Reeves poses with the red budget box outside her office on Downing Street in London, Britain October 30, 2024. REUTERS/Maja Smiejkowska
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Rachel Reeves on budget day. Pic: PA

Her plans to consolidate local authority pension schemes so they might match the investing power of their Canadian and Australian counterparts is part of the same theme.

Infrastructure investment is central to Reeves’s plan and these steps, universally welcomed, could unlock the private sector funding required to make it happen.

Bank governor frank on Brexit and growth

If the jury is out in a business financial community absorbing £25bn in tax rises, she has welcome support from Mr Bailey.

He is expected to deliver some home truths about the economic inheritance in plainer language than central bankers sometimes manage.

Britain’s growth potential, he says, “is not a good story”. He describes the labour market as “running against us” in the face of an ageing population.

With investment levels “particularly weak by G7 standards”, he will thank the chancellor for the pension reforms intended to unlock capital investment.

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Governor warns inflation expected to rise

He is frank about Brexit too, more so than the chancellor has dared.

While studiously offering no view on the central issue, Mr Bailey says leaving the EU had slowed the UK’s potential for growth, and that the government should “welcome opportunities to rebuild relations”.

There is a more coded warning too about the risks of protectionism, which is perhaps more likely with Donald Trump in the White House.

“Amid threats to economic security, let’s please remember the importance of openness,” the Bank governor will say.

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All that is welcome for Ms Reeves.

Already a groundbreaking chancellor, she is aiming for a political and economic legacy that extends beyond her gender and the dress code.

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United Utilities increases profit by more than £100m as it seeks more bill rises

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United Utilities increases profit by more than £100m as it seeks more bill rises

Water company United Utilities has reported hundreds of millions in profit as it seeks to further increase customer bills.

The utility serving seven million customers in the northwest of England recorded £335.7m in underlying operating profits for the first half of this year, up nearly 23% from £271.1m a year ago.

It comes as the firm has requested bills rise 32% to make them among the most expensive in England and Wales.

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The proposed average annual bill would increase to £584 by 2030 from the £443 typical yearly charge in the 2023/2024 financial year. Since April 2023 bills have been upped 6.4% and then 7.9%.

Bills hikes were behind the rise in revenue to more than £1.08bn from £975.4m in 2023.

Other ways of assessing profit were lower than the underlying operating sum. Profit before tax reached £140.6m while after tax profit topped £103.1m for the six months to the end of September 2024, both lower than a year earlier.

Boss’s pay

Bonus and benefits payments worth £1.416m were paid to two executives on top of £1.128m in base pay, according to analysis of company filings done by the Liberal Democrats.

It’s down compared with 2022/2023 when three executives were given £1.6m in base pay and £2.456m in bonuses and benefits.

Read more:
Water giant United Utilities strikes £1.8bn pension deal

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The environment

In a year of record sewage outflows into waterways the company was one of just three firms that met the Environment Agency’s top four-star performance ranking.

United Utilities in July came under investigation by water regulator Ofwat for not meeting its obligation to minimise pollution.

In response the company said at the time: “We understand and share people’s concerns about the health of the environment and the operation of wastewater systems, including combined sewer overflows.”

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