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The government has ruled out a U-turn on the costly tax-cutting mini-budget and the chancellor will not resign despite mounting pressure.

It comes after a day in which the Bank of England was forced to launch a temporary bond-buying programme as it took emergency action to prevent “material risk” to UK financial stability.

Bank’s ‘nearly unthinkable’ intervention – economy latest

Sky’s political editor Beth Rigby was told that the chancellor, Kwasi Kwarteng, would not be resigning and that there would be “no reversal of policy”.

A minister told deputy political editor Sam Coates it was “bulls***t” to say that today’s market movement was related to the mini-budget announcement.

And on The Take with Sophy Ridge, chief secretary to the Treasury Chris Philp denied that the government had any responsibility and said there would be no change of course.

Politics Hub: No mini-budget reversal and chancellor will not resign

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‘We’re not going to change course’

The Bank will buy as many long-dated government bonds as needed between now and 14 October in a bid to stabilise financial markets in the wake of the mayhem that followed the government’s mini-budget last Friday.

In addition to the plunge in the value of the pound, it has also seen investors demand a greater rate of return for UK government bonds – essentially IOUs.

That is because the level of borrowing required to fund the government giveaway, including tax cuts and energy aid for households and businesses, shocked the market which immediately questioned the sustainability of the public finances.

City minister Andrew Griffith told Sky’s economics editor Ed Conway: “Every major economy is dealing with exactly the same issues.”

“They [the bank] have made a targeted and timely intervention in the market. That’s their decision, but they’ve done so working very closely with the chancellor.”

The Bank’s action comes after the International Monetary Fund added its voice to criticism of the growth plan.

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Govt sticking to ‘mini budget’ despite turmoil

What the Bank’s action is aimed at doing is tackling the consequences of rising bond yields, in this instance a liquidity crunch facing pension funds.

The pound fell back in response but bond yields did ease back from multi-year highs.

WHY THE BANK OF ENGLAND HAS ACTED


 Ian King

Ian King

Business presenter

@iankingsky

There are some very, very specific reasons why the Bank of England is intervening in this particular asset class in long-dated gilts – that’s gilts of a 20 to 30 year duration.

It affects traditional pension funds where a retiree is guaranteed a certain payout at their retirement based on their final salary when they retire.

Now, a lot of these funds use long-dated gilts as part of their investments and what has been happening over recent days is a lot of the investment funds have been asking pension funds to post more collateral – to put up cash.

It has been reported in The Times that actually these cash calls have been running into tens of billions of pounds since the beginning of the week because of this spike in long-dated gilt yields.

That is why the Bank of England is specifically targeting that with this gilt intervention.

It is aimed at seeing off a crisis that’s potentially starting to emerge in pension funds.

The Bank said in a statement: “Were dysfunction in this (long-dated bond) market to continue or worsen, there would be a material risk to UK financial stability.

“This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.”

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Senior Tory blames mini-budget for turmoil

‘Significant’ interest rate rise likely ahead

The programme marked the Bank’s first policy intervention as it battles to bring down inflation and ease the cost of living crisis. Its chief economist signalled on Tuesday that a “significant” rise in Bank rate was also likely ahead.

The government’s growth plan is only seen as adding inflationary pressure to the economy, leaving it at loggerheads with the Bank’s mandate.

The Bank said the bond purchases, which would be fully covered by the Treasury in the event of any losses, would be sold back once market conditions had stabilised.

The announcement certainly had an immediate effect on the market.

Data showed that 30-year bond yields fell back to 4.3%, having risen to levels above 5% not seen since 2002 earlier in the day. There were similar falls for 20-year yields.

Those for 10-year bonds also fell back below 4% from 4.6%.

Stock markets, which had endured widespread falls Europe-wide amid recession fears, erased some of their losses.

The FTSE 100 had been almost 2% down but was just 0.8% lower on the day just before 1pm.

The pound, however, was a cent and a half down versus the dollar shortly after the announcement, to stand at $1.0578, and a cent lower against the euro. It later moved back towards $1.07 as market surprise at the intervention eased.

The single European currency was also suffering against a resurgent US currency.

Bank going ‘toe-to-toe’ with the market

The Bank said it would also postpone its efforts to unwind the sale of bonds it acquired through quantitative easing during the financial and COVID crises.

The Bank had planned to reduce its £838bn of gilt holdings by £80bn over the next year.

Neil Wilson, chief markets analyst at Markets.com, said the move followed evidence of “severe liquidity stress”.

This would have been particularly evident for pension funds who have faced demands for additional cash to cover off rising yields.

“We’re now seeing the Bank go toe-to-toe with the market and this might not lead to any decrease in volatility.”

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Woman dies in skydiving incident in County Durham

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Woman dies in skydiving incident in County Durham

A woman has died in a skydiving incident in County Durham.

Emergency crews were called to Wreford’s Farm in Shotton Colliery, near Peterlee, on Sunday morning.

The woman, aged in her 30s, was pronounced dead at the scene.

A Durham Constabulary spokesperson said the woman’s death is not being treated as suspicious and a file will be prepared for the coroner.

North East Ambulance Service said it was called to the incident at 10.17am on Sunday.

“We dispatched one ambulance crew and one specialist paramedic to the incident,” a spokesperson added.

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Wreford’s Farm is described on its website as a “small, family run farm” which produces pork and beef using “regenerative agriculture”.

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No criminal charges over death of ice hockey player Adam Johnson whose neck was cut by opponent’s skate

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No criminal charges over death of ice hockey player Adam Johnson whose neck was cut by opponent's skate

No criminal charges will be brought over the death of an ice hockey player who died during a match in Sheffield, prosecutors have announced.

Nottingham Panthers’ Adam Johnson died in October 2023 after his neck was cut by an opposition player’s skate during a match at Sheffield’s Utilita Arena.

The Sheffield Steelers player, Matthew Petgrave, was arrested on suspicion of manslaughter and later bailed – but the Crown Prosecution Service (CPS) has now said it will not bring criminal charges against the Canadian.

Michael Quinn, deputy chief crown prosecutor, said: “This was a shocking and deeply upsetting incident. The CPS and South Yorkshire Police have worked closely together to determine whether any criminal charges should be brought against the other ice hockey player involved.

“Following a thorough police investigation and a comprehensive review of all the evidence by the CPS, we have concluded that there is not a realistic prospect of conviction for any criminal offence and so there will not be a prosecution.

“Our thoughts remain with the family and friends of Adam Johnson.”

Flowers and messages left in tribute to Nottingham Panthers' ice hockey player Adam Johnson outside the Motorpoint Arena in Nottingham, the home of the Panthers. Mr Johnson died after an accident during a Challenge Cup match with Sheffield Steelers on Saturday night. Picture date: Monday October 30, 2023.
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Tributes were left outside the Motorpoint Arena in Nottingham following the ice hockey player’s death. Pic PA

Before joining Nottingham Panthers, the Minnesota-born Johnson played in Pennsylvania for the Pittsburgh Penguins, and Sweden for the Malmo Redhawks.

He also played in California for Ontario Reign and in Germany for Augsburger Panther.

A post-mortem examination confirmed the 29-year-old died as a result of the fatal neck injury.

The crowd of 8,000 spectators watched in horror as desperate attempts were made to save his life as he lay on the ice, shielded by fellow players.

The game was abandoned and spectators were asked to leave in the aftermath.

Lit candles among the flowers and messages left in tribute to Nottingham Panthers' ice hockey player Adam Johnson outside the Motorpoint Arena in Nottingham, the home of the Panthers. Mr Johnson died after an accident during a Challenge Cup match with Sheffield Steelers on Saturday night. Picture date: Monday October 30, 2023.
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Pic PA

Kari Johnson, Johnson’s aunt, was watching the match via a livestream with his father and grandmother when he was fatally injured.

Speaking to Sky News at the time, Ms Johnson said: “It was a mess, it was a nightmare, it was like it wasn’t real. We were in shock, we couldn’t believe this was happening.”

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Kari Johnson said her nephew was ‘a kind soul’

Ms Johnson described her nephew as a “kind soul” and a “private kid” who “never would have wanted to be in the limelight like this”.

He simply wanted to be “good at hockey and have fun”, she said, adding he was “having the time of his life in the UK” and was planning to get engaged to his girlfriend.

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In January 2024, Sheffield’s senior coroner, Tanyka Rawden, suspended her investigation while the police inquiry took its course.

It later emerged that Ms Rawden had issued a Prevention of Future Deaths Report to Ice Hockey UK and the English Ice Hockey Association (EIHA) about the use of neck guards in the sport.

In the report, Ms Rawden said she was “sufficiently concerned that deaths may occur in the future if neck guards or protectors are not worn”, with the bodies given 56 days to say what action had been taken – or why action had not been taken.

Neck guards have been mandatory in the Elite League (EIHL), in which the Nottingham Panthers and Sheffield Steelers compete, since January 2024.

This followed the International Ice Hockey Federation’s decision in December to mandate the use of neck laceration protectors for its competitions.

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Government reviewing ‘right to family life’ court decisions as sex offenders to be denied refugee status

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Government reviewing 'right to family life' court decisions as sex offenders to be denied refugee status

Court decisions where people were granted asylum after arguing they had a “right to family life” will be reviewed as the government plans to ban migrants convicted of sex offences, the home secretary has said.

Foreign nationals who are added to the sex offenders register will forfeit their rights to protection under the Refugee Convention, the Home Office announced.

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As part of the 1951 UN treaty, countries are allowed to refuse asylum to terrorists, war criminals and individuals convicted of a “particularly serious crime” – which is currently defined in UK law as an offence carrying a sentence of 12 months or more.

The government now plans to extend that definition to include all individuals added to the Sex Offenders’ Register, regardless of the length of sentence, in an amendment to the Border Security, Asylum and Immigration Bill, which is currently going through parliament.

Home Secretary Yvette Cooper told Sky News the new definition would also “take into account” sexual offence convictions in another country.

However, she was less clear if those affected will still be able to appeal against their removal from the UK under the European Convention on Human Rights (ECHR).

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More than 10,000 people have now been detected crossing the Channel. Pic: PA
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More than 10,000 people have now been detected crossing the Channel. Pic: PA

She said: “We continue to comply with international law, but the whole point is that our laws and our frameworks are about how we interpret international law… and how we make sure that the courts are then making their decisions based on the UK law that parliament has passed.”

She added the government is “reviewing” a “series of decisions” made in the courts where criminals have been allowed to stay in the UK under Article 8 of the Human Rights Act, which protects the right to respect “your private life, your family life, your home and your correspondence”.

“We are reviewing that because we do believe that the way in which it’s being interpreted in the courts is an issue and actually, there is greater clarification we can provide through our law to address that,” she said.

It is unclear how many asylum seekers will be affected by the change in law, as the government has been unable to provide any projections or past data on the number of asylum seekers added to the Sex Offenders’ Register.

Ms Cooper earlier said: “Sex offenders who pose a risk to the community should not be allowed to benefit from refugee protections in the UK. We are strengthening the law to ensure these appalling crimes are taken seriously.”

Safeguarding and Violence Against Women and Girls Minister Jess Philips said: “We are determined to achieve our mission of halving violence against women and girls in a decade.

“That’s exactly why we are taking action to ensure there are robust safeguards across the system, including by clamping down on foreign criminals who commit heinous crimes like sex offences.”

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Has Labour tackled migration?

The Home Office would like voters to see this as a substantial change. But that’s hard to demonstrate without providing any indication of the scale of the problem it seeks to solve.

Clearly, the government does not want to fan the flames of resentment towards asylum seekers by implying large numbers have been committing sex crimes.

But amid rising voter frustration about the government’s grip on the issue, and under pressure from Reform – this measure is about signalling it is prepared to take tough action.

Conservatives: ‘Too little, too late’

The Conservatives claim Labour are engaged in “pre-election posturing”.

Chris Philp, the shadow home secretary, said: “This is too little, too late from a Labour government that has scrapped our deterrent and overseen the worst year ever for small boat crossings – with a record 10,000 people crossing this year already.

“Foreign criminals pose a danger to British citizens and must be removed, but so often this is frustrated by spurious legal claims based on human rights claims, not asylum claims.”

The Home Office has also announced plans to introduce a 24-week target for appeal hearings (known as “first-tier tribunals”) to be held for rejected asylum seekers living in taxpayer-supported accommodation, or for foreign national offenders.

The current average wait is 50 weeks.

The idea is to cut the asylum backlog and save taxpayers money – Labour have committed to end the use of asylum hotels by the end of this parliament.

It’s unclear how exactly this will be achieved, although a number of additional court days have already been announced.

The government also plans to crack down on fake immigration lawyers who advise migrants on how to lodge fraudulent asylum claims, with the Immigration Advice Authority given new powers to issue fines of up to £15,000.

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