Jeremy Hunt to join Liz Truss at Chequers for talks on economic plans

Prime Minister Liz Truss and Jeremy Hunt will hold talks at Chequers today as the government tries to salvage its economic credibility.

Mr Hunt, who has replaced Kwasi Kwarteng as chancellor, said in a statement that his focus was on growth "underpinned by stability".

He warned of possible tax rises and savings in public spending, saying the mini-budget went "too far, too fast".

But some Conservatives are unhappy amid disquiet over Ms Truss's leadership.

In a series of interviews on Saturday, the prime minister's new right-hand man signalled he would slow down Ms Truss's tax-cutting agenda and reverse some of the pledges made by Mr Kwarteng, who was sacked on Friday.

He said this was necessary to ensure stability on the financial markets.

"Taxes are not going to come down by as much as people hoped, and some taxes will have to go up," the chancellor told BBC Radio 4's Today programme. "I'm going to be asking all government departments to find additional efficiency savings."

It comes as the Times reported that Mr Hunt planned to delay by a year a 1p cut to the basic rate of income tax - a flagship part of the 23 September mini-budget.

However, the Treasury has so far refused to confirm the report, with a spokesman saying: "We cannot speculate on any tax changes outside of a fiscal event."

Mr Hunt is due to outline the government's refreshed economic plan in a statement on 31 October, a task his predecessor was building up to following the aftermath of his mini-budget.

In his latest statement, released on Saturday night, Mr Hunt said: "My 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 also said he intended to be "honest with people" about the "very difficult decisions" that had to be made "both on spending and on tax to get debt falling".

"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," Mr Hunt added.

Meanwhile, the PM's authority has come under increasing pressure - with some Tory MPs telling the BBC's Laura Kuenssberg Mr Hunt's appointment means Ms Truss is "in office, but not really in power".

The prime minister's hopes of survival could hinge on what she and her chancellor decide over the next two weeks.

There will be a budget at the end of the month that needs to convince financial markets and prove politically palatable to a fuming, mutinous Tory party.

Today's meeting at the prime minister's country residence is their first chance to have detailed discussions about the government's new fiscal plan - which is expected to junk the tax-cutting agenda Liz Truss promised during the Tory leadership contest.

Jeremy Hunt has been clear that nothing is off the table and that tax rises and spending cuts will be needed. But many Conservative MPs are furious Liz Truss has led the government into this chaos and are talking privately about trying to turf her out.

One former minister predicted Ms Truss would be gone within weeks - but for now, she limps on, hoping the current turmoil subsides.

The imminent talks come as Andrew Bailey, the governor of the Bank of England, warned that interest rates may need to be raised higher than previously expected in order to keep UK inflation under control.

"As things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August," Mr Bailey said in Washington, less than three weeks before the Bank's monetary policy committee is due to meet.

Turning to his initial conversations with the new chancellor, Mr Bailey described an "immediate meeting of minds on the importance of stability and sustainability".

Elsewhere in the US, President Joe Biden weighed in on the political situation in the UK, saying he "wasn't the only one that thought it was a mistake" when asked about Ms Truss's original economic plan.

He called the outcome "predictable" but said, while he disagreed with the prime minister's policies, it was up to the British people.

Mr Biden also dismissed concerns about the strength of the dollar. "The problem is the lack of economic growth and sound policy in other countries," he told a White House pool reporter.

Following the mini-budget, the pound plummeted to a record low against the dollar and the cost of government borrowing climbed as markets reacted to the package - which was not accompanied by an official assessment of how the UK economy would perform.