Jeremy Hunt has admitted the government went “too far, too fast” and that he will have to take some “very difficult decisions” on spending and tax to get the economy back up and running.
But in an apparent bid to restore trust in the government’s handling of the economy, Mr Hunt released a statement on Saturday night saying his focus is on “growth underpinned by stability”.
“The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world-class public services. But we went too far, too fast,” he said.
He appeared to warn the public it won’t be an easy road, saying the government has to “be honest with people”.
“We are going to have to take some very difficult decisions both on spending and on tax to get debt falling but the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people,” he said.
“I will set out clear and robust plans to make sure government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances.”
Please use Chrome browser for a more accessible video player
1:53
Can Jeremy Hunt save Liz Truss?
While some Tory MPs welcomed the new appointment as “an experienced pair of hands”, others questioned why Mr Kwarteng was the one who had to go when he was pursuing policies Ms Truss espoused in her leadership campaign.
Advertisement
Meanwhile, the Sunday Times is reporting that Mr Hunt will delay a planned 1p reduction to the basic rate of income tax by one year after the country’s fiscal watchdog warned that the public finances were in a worse state than expected.
In August, the Bank said it expected the rate of inflation to peak at 13% this year – and remain above 10% for a few months before falling.
But now, BoE governor Andrew Bailey says the realities of inflation might require a stronger interest rates response from the central bank.
Image: Jeremy Hunt and Andrew Bailey. Pic: HM Treasury
Mr Bailey said he spoke to Mr Hunt on Friday and had a “meeting of minds” on the issue of “fiscal sustainability”.
Taking questions in Washington, he said: “I can tell you that I spoke to Jeremy Hunt, the new chancellor, yesterday. I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that.”
He continued: “It’s not appropriate for me to constrain the choices he makes but the very clear message I would give and it is a clear message for everybody, including a clear message for markets.
“I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability.”
Please use Chrome browser for a more accessible video player
1:53
Can Jeremy Hunt save Liz Truss?
‘Mistakes’ in mini-budget
Reflecting on the government’s recent mini-budget, Mr Hunt told Sky News that “it was a mistake when we were going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest”.
He added that it was also an error to “fly blind” by not accompanying the “fiscal event” with an economic forecast by the Office for Budget Responsibility, which many argue sent the financial markets into turmoil.
On tax cuts, he said: “We won’t have the speed of tax cuts we were hoping for and some taxes will go up.”
Asked if this would mean a return to austerity, he replied: “I don’t think we’re talking about austerity in the way we had it in 2010. But we’re going to have to take tough decisions on both spending and tax.”
Romania has said a drone breached its airspace during a Russian attack on neighbouring Ukraine.
Fighter jets were scrambled on Saturday, coming close to taking down the aircraft as it was flying very low before it left national airspace toward Ukraine, defence minister Ionut Mosteanu said.
Romania is the latest NATO member state to report an incursion, with Poland deploying aircraft and closing an airport in the eastern city of Lublin on Saturday, three days after it shot down Russian drones in its airspace.
They are the first known shots fired by a member of the Western alliance during Russia’s war in Ukraine.
Please use Chrome browser for a more accessible video player
2:21
Russian drones enter Polish airspace: What we know
Meanwhile, military exercises are taking place over the Barents Sea, with Russia and Belarus conducting joint drills.
Russian MiG-31 fighter jets equipped with hypersonic ballistic missiles completed a four-hour flight over the neutral waters as part of ongoing “Zapad 2025” military exercises, the Interfax news agency reported on Saturday.
Romania has had Russian drone fragments fall on to its territory repeatedly since Russia began waging its full-scale invasion of Ukraine three years ago.
More on Belarus
Related Topics:
Two F-16 fighter jets were initially scrambled by Romania, and later two Eurofighters.
Citizens in the southeastern county of Tulcea near the Danube and its Ukrainian border were warned to take cover, the defence ministry said.
The ministry said the drone dropped off their radar 20km (12 miles) southwest of the village of Chilia Veche.
While helicopters were surveying the area looking for possible drone parts, Mr Mosteanu told private television station Antena 3 that “all information at this moment indicates the drone exited airspace to Ukraine”.
Please use Chrome browser for a more accessible video player
1:52
Russia getting ‘ready for war with NATO’
Ukrainian President Volodymyr Zelenskyy said on social media that data showed the drone breached about 10km (six miles) into Romanian territory and operated in NATO airspace for around 50 minutes.
He said Belarusian airspace was also used for entry into Ukraine’s airspace.
Mr Zelenskyy described the reported incursion as “an obvious expansion of the war by Russia,” and called for “tariffs against Russian trade” and a “collective defence”.
He warned: “Do not wait for dozens of “shaheds” [Iranian-designed drones] and ballistic missiles before finally making decisions.”
NATO has said it plans to strengthen eastern flank defence, following earlier Polish airspace violations.
US secretary of state Marco Rubio called the Polish incursion “unacceptable and unfortunate and dangerous”, and said while it was unclear if the drones were intentionally sent to Poland, if it was the case, it would be “a highly escalatory move”.
Image: Donald Trump boarding Air Force One on Saturday. Pic: Reuters
On Saturday, Donald Trump said on his Truth Social platform that he was “ready to do major sanctions on Russia”, but only when all NATO nations “do the same thing” and “stop buying oil from Russia”.
Mr Trump has repeatedly threatened sanctions against Moscow, so far without any action.
The president also said NATO members should also put 50% to 100% tariffs on China – and only withdraw them if the conflict ends.
NATO member Turkey has been the third largest buyer of Russian oil since 2023, after China and India, according to the Centre for Research on Energy and Clean Air, with fellow members Hungary and Slovakia also buying energy supplies from Moscow.
The war in Ukraine would end if all NATO countries stopped buying oil from Russia, Donald Trump has said.
The US president, in a post on his Truth Social platform on Saturday, said the alliance’s commitment to winning the war “has been far less than 100%” and the purchase of Russian oil by some members is “shocking”.
Doing so “greatly weakens your negotiating position and bargaining power, over Russia,” he said.
NATO member Turkey has been the third largest buyer of Russian oil since 2023, after China and India, according to the Centre for Research on Energy and Clean Air, with fellow members Hungary and Slovakia also buying energy supplies from Moscow.
A NATO ban on the practice plus tariffs on China would “also be of great help in ENDING this deadly, but RIDICULOUS, WAR”, he added.
The president said NATO members should also put 50% to 100% tariffs on China – and only withdraw them if the conflict ends.
‘China’s grip’ on Russia
“China has a strong control, and even grip, over Russia,” Mr Trump posted, and powerful tariffs “will break that grip”.
The US president has already placed a 25% import tax on goods from India over its buying of Russian energy products.
He did not include in that list Russian President Vladimir Putin, who launched the invasion.
Image: President Donald Trump at a New York Yankees baseball game on Thursday. Pic: AP
Image: Pic: AP
Village changes hands
On the battlefield on Saturday, Russian troops took control of the village of Novomykolaivka in Ukraine’s southeastern Dnipropetrovsk region, the Russian Defence Ministry said.
A drone attack hit an oil refinery in the city of Ufa, around 870 miles (1,400km) from the border with Ukraine, the local governor said, calling it a terrorist incident.
Please use Chrome browser for a more accessible video player
0:29
Drones shot down in Poland
NATO Secretary-General Mark Rutte said on Friday the 32-nation alliance would place military equipment on the border with Belarus, Russia and Ukraine to deter potential Russian aggression.
Operation ‘Eastern Sentry’ followed Wednesday’s provocative incursion by multiple Russian drones into the airspace of Poland, another NATO member.
Polish forces shot down the drones, which Moscow said went astray because they were jammed.
Please use Chrome browser for a more accessible video player
1:54
Prince Harry’s surprise visit to Ukraine
Prince Harry’s surprise visit
The Duke of Sussex made a surprise visit to Ukraine on Friday, promising to do “everything possible” to help the recovery of injured military staff.
Travelling on an overnight train to Kyiv, Prince Harry, who has since left the country, told The Guardian: “We cannot stop the war but what we can do is do everything we can to help the recovery process.
“We have to keep it [the war] in the forefront of people’s minds. I hope this trip will help to bring it home to people because it’s easy to become desensitised to what has been going on.”
Aid workers say the number of people leaving has spiked in recent weeks, but many families remain stuck due to difficulties with transportation and housing.
Others have been displaced many times and do not want to move again, not trusting that anywhere in the Strip is safe.
Please use Chrome browser for a more accessible video player
0:54
Earlier this month: IDF drops evacuation flyers on Gaza before tower bombed
In a message shared on social media on Saturday, Israel’s army told the remaining Palestinians in Gaza City to “leave immediately” and move south into what it is calling a humanitarian zone.
Sites in southern Gaza, where Israel is telling people to go, are overcrowded, the United Nations has said.
A spokesperson for the Israeli army said more than 250,000 people have left Gaza City – but the UN puts the number at around 100,000 between mid-August and mid-September.
The UN and aid groups have warned that displacing hundreds of thousands of people will exacerbate the dire humanitarian crisis in the enclave.
The Hamas-run Gaza health ministry said on Saturday that seven people, including children, died from malnutrition-related causes over the past 24 hours.
Israel has said it now controls 75% of Gaza, much of which has been reduced to fields of rubble. It has vowed to take the rest.
The current conflict followed Hamas’s attack on Israel on 7 October 2023, when militants killed 1,200 people and took around 250 people hostage.
Israel’s retaliatory offensive has killed at least 64,803 Palestinians, according to Gaza’s health authorities. It does not distinguish between civilians and combatants in its count.