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Be in absolutely no doubt, the prime minister is in deep trouble.

She has sacked her chancellor, committed a second major U-turn on her mini-budget, and junked the core of her economic policy.

And she did so, awkwardly and uncomfortably, in no more than eight minutes.

Government descends into chaos as PM faces battle to survive – follow latest updates

In an excruciating news conference – so short the gathered political press pack were left open-mouthed as she departed – Liz Truss made her already perilous political position even worse.

The aim of this breakneck change in direction was to attempt to calm markets and her Conservative colleagues, but instead, she left huge questions unanswered.

It’s worth underlining the significance of what the prime minister just announced.

More on Liz Truss

First, on policy, she has buckled and reversed her position on corporation tax. She will now go ahead with the increase proposed by her leadership rival, Rishi Sunak.

During the contest to replace Boris Johnson as Tory leader, Ms Truss had said increasing the rate from 19% to 25% next April would “put off people who want to invest in Britain” and amount to “cutting off our nose to spite our face”.

It was a significant part of the platform on which she was elected Tory leader, now humiliatingly discarded in order to bring in around £18bn to fill the black hole left by last month’s mini-budget.

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‘You’re out of your depth, prime minister?’

Read more:
Ministers say PM ‘cannot survive’ – so how could Liz Truss be removed?

She said it was a “down payment” on the medium-term fiscal plan due to be set out on 31 October – a signal to the markets that she’s prepared to make more reversals if necessary.

Does she still believe it will put people off investing? We don’t know because she didn’t stick around at the news conference long enough to be asked.

On the sacking of Kwasi Kwarteng as chancellor, she expressed her sorrow – but again, did not answer the obvious question about how she can possibly justify his departure without her own.

British Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng walk outside a hotel, as Britain's Conservative Party's annual conference continues, in Birmingham, Britain, October 4, 2022. REUTERS/Toby Melville
Image:
Liz Truss and her former chancellor Kwasi Kwarteng

The chancellor, who was supposed to be one of her closest political friends, was also humiliatingly discarded – along with the government’s radical economic mission for which she had asked him to lead the charge.

The way in which the prime minister delivered this news really matters. Not just because of the lack of scrutiny that came from only taking four questions and barely engaging with them in the answers – but because her party, and indeed the markets, will have been watching to see how she handled the situation.

That news conference was not just about communicating with the public. The messages I received from Conservative MPs ahead of the news conference made clear that she needed to put in a really strong, reassuring performance.

Their fears are that she is out of her depth. They want to see that she can handle being prime minister. And the early signs are that her performance today failed on both fronts.

One MP has messaged me saying it was “shockingly bad”, even by Liz Truss’s standards.

Jeremy Hunt says that while now is not the right time to change Prime Minister, he hasn't ruled out a return to frontline politics
Image:
Jeremy Hunt has replaced Kwasi Kwarteng as chancellor

Jeremy Hunt’s installation as the new chancellor may be intended to show the ship is being steadied – that someone with deep experience in government is at the helm of the economy and that markets do not need to fear further surprises.

But power flows from Number 10. The prime minister is the head of government. The prime minister is the person who must command the confidence of the Commons if they are to remain in post.

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This prime minister looks out of her depth. “It’s not going to last,” is how one cabinet minister put it to me.

:: The new chancellor, Jeremy Hunt, will talk to Sky News at 7.15am.

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Lack of heavy rescue equipment into Gaza leaves hundreds to die slow deaths under rubble

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Lack of heavy rescue equipment into Gaza leaves hundreds to die slow deaths under rubble

It was in the evening that the bombing started to intensify.

Salah Jundia, his father and brothers huddled together in their home in Shujaiyya, just east of Gaza City, trying to work out what to do.

It was too risky for them to leave at night. There were a lot of them too. Extended family living across four storeys. They decided they would wait until after dawn prayers.

The explosion tore through the building just before 5am, collapsing one storey on to the next.

The remains of where the family lived - where loved ones were trapped beneath the rubble
Image:
The aftermath of Israel’s bombing campaign in Shujaiyya, just east of Gaza City

Salah Jundia
Image:
Salah Jundia

Jundia says he survived because pieces of bedroom furniture fell on top of him.

Then he looked for his father and brothers.

“I found one of them calling for help. I removed the rubble covering him with my hands. Then I saw another brother covered in rubble but he was dead,” he told Sky News.

Jundia added: “My father was also dead. My other brother was also dead. We got them out and that is when I saw that the whole building had collapsed.”

Over the next few hours, they scrambled to rescue who they could.

An aunt and uncle and one of their children, Shaimaa. Uncle Imad and his son Mohammad. The bodies of Montasir and Mustaf.

One of the child victims of the attack on the home in Gaza City
Image:
One of the child victims of the attack on the home near the Gaza City

One of the child victims of the attack
Image:
Another one of child victims of the attack

Jundia says he could hear cries for help, but they were coming from deep in the rubble and were impossible to reach.

The rescue teams on site – civil defence they are called – did not have the kit to clear through three floors of 500 square metres, 30cm slabs of concrete.

Palestinians drilling to try and reach the people trapped below the rubble
Image:
Rescuers drilling to try and reach the people trapped below the rubble

Efforts to free those trapped beneath the rubble in Gaza City
Image:
Efforts to free those trapped beneath the rubble near the Gaza City

In the afternoon, Jundia says Israel’s Defence Forces (IDF) told rescue teams to leave as they would be resuming their bombardment.

Jundia buried the bodies he had managed to pull out but he knew 15 of his family members, 12 of them children, were still somewhere inside the rubble, still crying for help.

He made a desperate video appeal, begging the Red Cross and Arab countries to pressure Israel to grant access to the site. It was picked up on a few social media accounts.

Israel won’t allow heavy equipment into Gaza. No diggers or bulldozers, nor the fuel or generators to run them.

They say it will fall into Hamas’s hands.

It was a major sticking point during the ceasefire and it is a major issue now as the bombardment continues, given the fact that hundreds if not thousands of civilians might survive if there were the equipment to extract them.

Members of Salah Jundia's family left alive after the attack
Image:
Members of Salah Jundia’s family left alive after the attack

Salah Jundia and his family
Image:
Salah Jundia and his surviving family

Civil defence trying to get to the Jundia family home over the next few days were halted because the IDF were in the vicinity. A family friend tried himself and was killed.

The footage that our camera teams have shot in Shujaiyya over the past two weeks shows how civil defence teams struggle to save those who are trapped and injured with the most rudimentary of equipment – plastering trowels, sledgehammers, ropes and small drills.

“The tight siege stops civil defence equipment from getting in,” says one.

They added: “So we are taking much longer to respond to these events. Time is a factor in getting these people out. So we call immediately for the necessary equipment to be allowed in for the civil defence to use.”

The IDF say they are investigating the circumstances around the Jundia family as a result of our enquiries.

In relation to the access of heavy equipment into Gaza, they say they work closely with international aid organisations to enable the delivery of humanitarian activities in accordance with international law.

The last contact Jundia had from beneath the rubble was a phone call from his uncle Ziad, three days after the strike.

“The line was open for 25 seconds then it went dead. We don’t know what happened. We tried to call, but there was no answer,” he says.

He and his family were displaced several times before they returned home to Shujaiyya – to Rafah in the south, then Khan Younis and Deir al-Balah.

Along the way, Jundia lost one brother and a nephew to Israeli bombs.

Read more:
Israeli air strike hits Gaza hospital
Red dye dumped into US embassy in Israel protest
Israel shot at ambulances over ‘perceived threat’

“We were happy and all the family came back. We went back to our house. It was damaged, but we improvised and we lived in it. We have nothing to do with the resistance. We are not interested in wars. But we have been gravely harmed,” he says.

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China’s economy surges, but tariffs effect is yet to be seen

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China's economy surges, but tariffs effect is yet to be seen

China’s economy performed better than expected in the first quarter of the year – but it reflects a moment in time before the explosive trade war with the US, which has seen the world’s two biggest economies effectively decouple.

Economists had predicted that gross domestic product would grow by about 5.1% in January to March, compared with a year earlier. In the end, it grew 5.4%.

But these impressive figures obscure the very serious challenges China’s economy is facing in the wake of Donald Tump’s trade war – and it is almost certain growth will not remain this strong as the year goes on.

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Bobble-headed Trump explains China-US tariffs

The worst of Trump’s tariffs came into force in April, meaning they were not reflected in these figures.

In Q1, China faced an initial 10% tariff on all its exports to the US – which was then raised to 20% from 10 March.

But Beijing had planned and prepared for taxes at that level, and thus the impact was pretty minimal.

Growth was also propelled by the fact that exporters rushed to deliver orders in bulk before the tariffs came into force.

More on China

In fact, exports surged a remarkable 12% in March compared to a year earlier, a rate that will not be sustained.

Read more from Sky News:
White House looking at new trade deals
The art of doing a deal with Trump
US and UK ‘working hard’ on agreement

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Trump Tariffs: How the 10 days unfolded

Current tariffs on goods sold from China to America stand at 145%. Trade at that price is all but impossible.

Given exports account for a fifth of China’s economy, and consumer confidence domestically is still sluggish, there will be a significant hit to come.

Experts agree China will most likely miss its annual growth target of 5% – the question is by how much.

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Palestinian man forced to abandon loved ones trapped beneath rubble after IDF warning

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Lack of heavy rescue equipment into Gaza leaves hundreds to die slow deaths under rubble

It was in the evening that the bombing started to intensify.

Salah Jundia, his father and brothers huddled together in their home in Shujaiyya, just east of Gaza City, trying to work out what to do.

It was too risky for them to leave at night. There were a lot of them too. Extended family living across four storeys. They decided they would wait until after dawn prayers.

The explosion tore through the building just before 5am, collapsing one storey on to the next.

The remains of where the family lived - where loved ones were trapped beneath the rubble
Image:
The remains of Salah Jundia’s home in Shujaiyya, just east of Gaza City

Salah Jundia
Image:
Salah Jundia

Jundia says he survived because pieces of bedroom furniture fell on top of him.

Then he looked for his father and brothers.

“I found one of them calling for help. I removed the rubble covering him with my hands. Then I saw another brother covered in rubble but he was dead,” he told Sky News.

Jundia added: “My father was also dead. My other brother was also dead. We got them out and that is when I saw that the whole building had collapsed.”

Over the next few hours, they scrambled to rescue who they could.

One of the child victims of the attack on the home in Gaza City
Image:
One of the child victims of the attack on the home near the Gaza City

One of the child victims of the attack
Image:
Another one of child victims of the attack

An aunt and uncle and one of their children, Shaimaa. Uncle Imad and his son Mohammad. The bodies of Montasir and Mustaf.

Jundia says he could hear cries for help, but they were coming from deep in the rubble and were impossible to reach.

The rescue teams on site – civil defence they are called – did not have the kit to clear through three floors of 500 square metres, 30cm slabs of concrete.

Palestinians drilling to try and reach the people trapped below the rubble
Image:
Rescuers drilling to try and reach the people trapped below the rubble

Efforts to free those trapped beneath the rubble in Gaza City
Image:
Efforts to free those trapped beneath the rubble near the Gaza City

In the afternoon, Jundia says Israel’s Defence Forces (IDF) told rescue teams to leave as they would be resuming their bombardment.

Jundia buried the bodies he had managed to pull out but he knew 15 of his family members, 12 of them children, were still somewhere inside the rubble, still crying for help.

He made a desperate video appeal, begging the Red Cross and Arab countries to pressure Israel to grant access to the site. It was picked up on a few social media accounts.

Israel won’t allow heavy equipment into Gaza. No diggers or bulldozers, nor the fuel or generators to run them.

They say it will fall into Hamas’s hands.

It was a major sticking point during the ceasefire and it is a major issue now as the bombardment continues, given the fact that hundreds if not thousands of civilians might survive if there were the equipment to extract them.

Members of Salah Jundia's family left alive after the attack
Image:
Members of Salah Jundia’s family left alive after the attack

Salah Jundia and his family
Image:
Salah Jundia and his surviving family

Civil defence trying to get to the Jundia family home over the next few days were halted because the IDF were in the vicinity. A family friend tried himself and was killed.

The footage that our camera teams have shot in Shujaiyya over the past two weeks shows how civil defence teams struggle to save those who are trapped and injured with the most rudimentary of equipment – plastering trowels, sledgehammers, ropes and small drills.

“The tight siege stops civil defence equipment from getting in,” says one.

They added: “So we are taking much longer to respond to these events. Time is a factor in getting these people out. So we call immediately for the necessary equipment to be allowed in for the civil defence to use.”

The IDF say they are investigating the circumstances around the Jundia family as a result of our enquiries.

In relation to the access of heavy equipment into Gaza, they say they work closely with international aid organisations to enable the delivery of humanitarian activities in accordance with international law.

The last contact Jundia had from beneath the rubble was a phone call from his uncle Ziad, three days after the strike.

“The line was open for 25 seconds then it went dead. We don’t know what happened. We tried to call, but there was no answer,” he says.

He and his family were displaced several times before they returned home to Shujaiyya – to Rafah in the south, then Khan Younis and Deir al-Balah.

Along the way, Jundia lost one brother and a nephew to Israeli bombs.

Read more:
Israeli air strike hits Gaza hospital
Red dye dumped into US embassy in Israel protest
Israel shot at ambulances over ‘perceived threat’

“We were happy and all the family came back. We went back to our house. It was damaged, but we improvised and we lived in it. We have nothing to do with the resistance. We are not interested in wars. But we have been gravely harmed,” he says.

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