Liz Truss admits ‘disruption’ to UK economy but stands by forecast-free mini-budget
Liz Truss has for the first time acknowledged that “there has been disruption” to the UK economy following last week’s mini budget.
Since the chancellor’s announcement of £45bn in tax cuts the value of the pound has plummeted, nearly half of mortgages have been pulled and the Bank of England launched a £65bn bail-out to save pension funds from collapse.
Asked on Friday whether she accepted this is largely a crisis of her government’s own making, the prime minister said: “It was very, very important that we took urgent steps to deal with the costs that families are facing this winter, putting in place the energy price guarantee for which we’ve had to borrow to cover the cost… but also making sure that we are not raising taxes at a time where there are global economic forces caused by the war in Ukraine that we need to deal with.
“I recognise there has been disruption. But it was really, really important that we were able to get help to families as soon as possible – that help is coming this weekend.
“Because this is going to be a difficult winter and I’m determined to do all I can to help families and help the economy at this time.”
The government’s energy price guarantee comes into force on Saturday.
It means the average household shouldn’t have to pay more than £2,500 a year on their energy bills.
Ms Truss defended the decision to present last week’s mini-budget without an accompanying forecast from the Office for Budget Responsibility (OBR) due to the need to respond rapidly to rising energy prices, amid concerns that average annual household bills could soon reach £6,000.
The lack of such a forecast is blamed by many – including Mel Stride MP, the Conservative chair of the treasury select committee – of contributing to the week’s turmoil on the markets.
The OBR said a forecast had been offered to Chancellor Kwasi Kwarteng but was not commissioned.
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Truss: Right to ‘take decisive action’
On Friday morning, the prime minister and chancellor met the OBR’s budget responsibility committee and afterwards issued a statement saying they “made it clear they value its scrutiny”.
Read more:
Will the housing market crash? Is my pension safe? Your questions answered
Storm clouds are thickening thanks to Truss and Kwarteng
But Ms Truss did not accept that failing to commission a forecast last week had been a mistake.
“It was important we acted quickly, in that timescale there couldn’t be a full OBR forecast. But we are committed to the OBR forecast.
“We are working together with the OBR. There will be an event on 23 November where the policies are fully analysed by the OBR, but it was a real priority to me to make sure we’re working to help struggling families.”
On Thursday, the chancellor committed to maintaining the triple lock on state pensions, which means they would rise in line with inflation (the triple lock means following whichever is higher consumer price inflation, average wage growth or 2.5%).
But the prime minister declined to offer a guarantee that benefits would also rise in line with inflation, despite a pledge from Boris Johnson’s government to do so.
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‘People have no faith in govt’
Ms Truss said the issue is “something that the work and pensions secretary is looking at, and she will make an announcement in due course, as is the normal practice for the autumn”.
But the prime minister argued the reversal of the National Insurance hike and support for businesses’ energy bills will help families.
“I had real fears that businesses could go out of business this winter because they were facing unaffordable energy bills,” she added.
“We put in place a business scheme, we put in place support for households across the country. That has cost us money, but it was important we acted quickly.”
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With the latest polls putting Labour more than 30 points ahead of the Conservatives, many backbenchers are concerned about the prospect of losing their seats at the next election.
Senior MP Charles Walker said on Friday the conversation is no longer about winning, but how much the party loses by.
But the prime minister declined to comment on whether her party is heading towards electoral defeat, responding that “100% of her focus” is on supporting “the British public and British businesses through this difficult winter”.
World
25% of young children and pregnant women malnourished in Gaza, charity says, as PM vows to fly critical medical cases to UK
A charity has warned 25% of young children and pregnant women in Gaza are now malnourished, with Sir Keir Starmer vowing to evacuate children who need “critical medical assistance” to the UK.
MSF, also known as Doctors Without Borders, said Israel’s “deliberate use of starvation as a weapon” has reached unprecedented levels – with patients and healthcare workers both fighting to survive.
It claimed that, at one of its clinics in Gaza City, rates of severe malnutrition in children under five have trebled over the past two weeks – and described the lack of food and water on the ground as “unconscionable”.
Pic: Reuters
The charity also criticised the high number of fatalities seen at aid distribution sites, with one British surgeon accusing IDF soldiers of shooting civilians “almost like a game of target practice”.
MSF’s deputy medical coordinator in Gaza, Dr Mohammed Abu Mughaisib, said: “Those who go to the Gaza Humanitarian Foundation’s food distributions know that they have the same chance of receiving a sack of flour as they do of leaving with a bullet in their head.”
The UN also estimates that Israeli forces have killed more than 1,000 people seeking food – the majority near the militarised distribution sites of the US-backed aid distribution scheme run by the GHF.
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‘Many more deaths unless Israelis allow food in’
In a statement on Friday, the IDF had said it “categorically rejects the claims of intentional harm to civilians”, and reports of incidents at aid distribution sites were “under examination”.
The GHF has also previously disputed that these deaths were connected with its organisation’s operations, with director Johnnie Moore telling Sky News: “We just want to feed Gazans. That’s the only thing that we want to do.”
Israel says it has let enough food into Gaza and has accused the UN of failing to distribute it, in what the foreign ministry has labelled as “a deliberate ploy” to defame the country.
‘Humanitarian catastrophe must end’
In a video message posted on X late last night, Sir Keir Starmer condemned the scenes in Gaza as “appalling” and “unrelenting” – and said “the images of starvation and desperation are utterly horrifying”.
The prime minister added: “The denial of aid to children and babies is completely unjustifiable, just as the continued captivity of hostages is completely unjustifiable.
“Hundreds of civilians have been killed while seeking aid – children, killed, whilst collecting water. It is a humanitarian catastrophe, and it must end.”
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Israeli military show aid waiting inside Gaza
Sir Keir confirmed that the British government is now “accelerating efforts” to evacuate children from Gaza who need critical medical assistance, so they can be brought to the UK for specialist treatment.
Israel has now said that foreign countries will be able to airdrop aid into Gaza. While the PM says the UK will now “do everything we can” to get supplies in via this route, he said this decision has come “far too late”.
Read more:
WHO: Gaza faces ‘manmade’ starvation
UN: People in Gaza ‘walking corpses’
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Last year, the RAF dropped aid into Gaza, but humanitarian organisations warned it wasn’t enough and was potentially dangerous. In March 2024, five people were killed when an aid parachute failed and supplies fell on them.
For now, Sir Keir has rejected calls to follow French President Emmanuel Macron and recognise a Palestinian state – despite more than 220 MPs signing a cross-party letter to demand he takes this step.
The prime minister is instead demanding a ceasefire and “lasting peace” – and says he will only consider an independent state as part of a negotiated peace deal.
World
‘Almost like a game of target practice’: British surgeon says IDF shooting Gazans at aid points
A British surgeon who recently returned from Gaza has told Sky News that there is “profound malnutrition” among the population – and claims IDF soldiers are shooting civilians at aid points “like a game of target practice”.
Dr Nick Maynard spent four weeks working inside Nasser Hospital, where a lack of food has left medics struggling to treat children and toddlers.
The conditions inside the hospital, in the south of the Strip, have been documented in a Sky News report.
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Malnourished girl: ‘The war changed me’
Dr Maynard told The World with Yalda Hakim: “I met several doctors who had cartons of formula feed in their luggage – and they were all confiscated by the Israeli border guards. Nothing else got confiscated, just the formula feed.
“There were four premature babies who died during the first two weeks when I was in Nasser Hospital – and there will be many, many more deaths until the Israelis allow proper food to get in there.”
Palestinians wait to receive food from a charity kitchen in Gaza City. Pic: Reuters
In other developments:
• Israel and the US have recalled their teams from Gaza ceasefire talks
• US envoy Steve Witkoff has accused Hamas “of failing to act in good faith”
• France has announced that it will recognise the state of Palestine
• An influential group of MPs is calling on the UK to “immediately” do the same
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‘Starvation used as a weapon’
‘They were shells’
Dr Nick Maynard has been going to Gaza for the past 15 years – and this is his third visit to the territory since the war began.
The British surgeon added that virtually all of the kids in the paediatric unit of Nasser Hospital are being fed with sugar water.
“They’ve got a small amount of formula feed for very small babies, but not enough,” he warned.
Dr Maynard said the lack of aid has also had a huge impact on his colleagues.
“I saw people I’d known for years and I didn’t recognise some of them,” he added. “Two colleagues had lost 20kg and 30kg respectively. They were shells, they’re all hungry.
“They’re going to work every day, then going home to their tents where they have no food.”
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Ex-Gaza aid worker claims personnel shot at Palestinians
IDF ‘shooting Gazans at aid points’
Elsewhere in the interview, Dr Maynard claimed Israeli soldiers are shooting civilians at aid points “almost like a game of target practice”.
He has operated on boys as young as 11 who had been “shot at food distribution points” run by the US and Israel-backed Gaza Humanitarian Foundation.
“They had gone to get food for their starving families and they were shot,” he said.
“I operated on one 12-year-old boy who died on the operating table because his injuries were so severe.”
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Gaza deaths increase when aid sites open
Dr Maynard continued: “What was even more distressing was the pattern of injuries that we saw, the clustering of injuries to particular body parts on certain days.
“One day they’d be coming in predominately with gunshot wounds to the head or the neck, another day to the abdomen.
“Twelve days ago, four young teenage boys came in, all of whom had been shot in the testicles and deliberately so.
“The clustering was far too obvious to be accidental, and it seemed to us like this was almost like a game of target practice.
“I would never have believed this possible unless I’d witnessed this with my own eyes.”
Palestinians brought to Nasser Hospital after being shot by Israeli forces, according to hospital officials and eyewitnesses. Pic: AP
Sky News has contacted the Israeli Defence Forces for comment.
An IDF spokesperson previously told Sky News it “strongly rejected” the accusations that its forces were instructed to deliberately shoot at civilians.
“To be clear, IDF directives prohibit deliberate attacks on civilians,” the spokesperson said, adding that the incidents are “being examined by the relevant IDF authorities”.
Read more:
Medics at Nasser hospital struggle to feed children
Gaza food situation ‘worst its ever been’
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Israeli military show aid waiting inside Gaza
The Gaza Humanitarian Foundation has been managing the supply of aid to Gaza since Israel lifted an 11-week blockade in May.
It has four aid distribution sites, all of which are located in Israeli military zones, with journalists prohibited from entering.
More than 1,000 people have been reported killed while trying to receive food aid since the GHF took over, according to the UN.
UNRWA, its relief agency for Gaza, has heavily criticised the scheme.
Commissioner general Philippe Lazzarini said: “The so-called ‘GHF’ distribution scheme is a sadistic death trap. Snipers open fire randomly on crowds as if they are given a licence to kill.”
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Just a fraction of the aid trucks needed are making it into the enclave, the UN has said, while multiple aid groups and the World Health Organisation have warned Gazans are facing “mass starvation”.
Mr Lazzarini quoted a colleague on Thursday and said malnourished Palestinians in the Gaza “are neither dead nor alive, they are walking corpses”.
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