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Kwasi Kwarteng is facing a mounting Tory rebellion over his plan to scrap the 45p top rate of income tax, but will tell Conservative party conference attendees today that he is “confident” that the plan is “the right one”.
The chancellor’s tax-cutting “mini” Budget, which also included a wave of new government borrowing, created turmoil in the markets last week and left him scrambling to prove that he will get a grip on debt.
Prime Minister Liz Truss has been warned that she faces defeat in the House of Commons if she persists with abolishing the 45p rate, the most controversial element of a debt-funded £45bn package.
She insisted yesterday that she would stick to the plan but admitted the 45p tax rate change had not been discussed in cabinet: “It was a decision the chancellor made,” she told the BBC’s Sunday with Laura Kuenssberg.
Truss will be tasked with bolstering party morale at its annual conference in Birmingham, despite reports of senior Tory no-shows, including former chancellor Rishi Sunak. How did the Conservative party end up trying to fight the bond market? And what are Truss’s options now?
The FT View is that the Truss administration should heed economic orthodoxy. Britain needs stable and credible policies, not zealotry, argues Martin Wolf. (FT, The Times)
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Five more stories in the news
1. EU considers overhaul of deficit rules The European Commission will table a proposal at the end of October for multiyear, country-specific plans to help capitals curb their debt burdens, officials in Brussels said, as part of a major reform to simplify the bloc’s deficit rules.
2. Opec+ plans production cut to prop up oil prices The oil-producing alliance is expected this week to discuss cutting output by more than 1mn barrels a day, by far the largest reduction since early in the coronavirus pandemic and equivalent to more than 1 per cent of global supplies, even as many countries fight to bring down energy costs.
3. Credit Suisse reassures investors of financial strength Senior executives spent the weekend reassuring clients, counterparties and investors about the Swiss bank’s liquidity and capital position after spreads on its credit default swaps, which offer protection against default, rose sharply on Friday.
4. Nato chief warns Russia against using nuclear weapons Nato secretary-general Jens Stoltenberg warned of “severe consequences” if Vladimir Putin used nuclear weapons in Ukraine, following escalating rhetoric from Moscow. “A nuclear war cannot be won and must never be fought”, Stoltenberg said.
5. Burkina Faso coup leader: ‘situation is under control’ Army captain Ibrahim Traoré, who was declared the west African country’s leader on Friday night, said “order is being restored” even as supporters of his coup, some waving Russian flags, attacked French institutions in the former French colony.
The day ahead
PMIs S&P Global/Cips September manufacturing purchasing managers’ indices are out for the eurozone, France, Germany, Italy, Spain, the UK and the US, where an initial reading showed faster growth than the month before, but the second-lowest reading since July 2020. (FT, WSJ)
International Atomic Energy Agency The nuclear watchdog’s board meets in Vienna, where it will elect officers following last week’s general conference.
Germany Unification Day The public holiday celebrates 32 years of reunification. Chancellor Olaf Scholz and French president Emmanuel Macron are reported to be planning a working dinner in Berlin if the former recovers from Covid-19. (Politico)
John Lewis Partnership free food The British retail-focused company will begin offering free meals to staff for 14 weeks across its department stores and Waitrose supermarkets to help with the cost of living crisis.
Nobel Prize in Physiology or Medicine The award will be announced in Stockholm, Sweden, followed by prizes for physics, chemistry, literature, peace and economics over the next week. (Nobel)
What else we’re reading
Giorgia Meloni raises fears for freedoms in Italy The Brothers of Italy leader has vowed to put “the defence of the natural family” at the centre of her arch-conservative government, the country’s first from the far-right since the second world war, raising concerns among liberals that it will roll back the clock on individual rights and social freedoms.
Investors are learning to love industry again For the last few decades, the sector has been overlooked as Wall Street embraced Silicon Valley, services and all things technology-related. But a range of factors is driving a resurgence of interest in manufacturing, Rana Foroohar writes.
The business card is back, sort of Just because physical mingling has returned, do people really want to go back to swapping germ-laden bits of cardboard bearing data that took hours to type into a phone back home? As it turns out, at a conference Pilita Clark attended, they very much did.
The new era of stronger hurricanes The US is investing in satellites and supercomputers to predict the impact of storms such as Hurricane Ian, which bore down on the east coast last week. But can technology lower the costs of such destruction in dollars and human lives?
Bullying at work — why it happens, what can be done Shouting. Yelling. Personal attacks. From sustained put-downs to career sabotage, abuse in the workplace is hard to eradicate. Should employers be doing more?
Work-life balance: A boundary used to mean the fence around your garden. Now it has moved into “self-care practices” to support our lives, writes Isabel Berwick. But it works.
From JK Rowling’s latest crime-writing alter ego Robert Galbraith to Scott Turow’s legal thriller, our murder mystery round-up shows the Nordic noir boom is still resounding.
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