PM SAYS MINI-BUDGET WAS ‘URGENT ACTION’
Prime minister Liz Truss has insisted the tax cuts outlined in chancellor Kwasi Kwarteng’s mini-budget are the "right plan", despite market turmoil since they were announced on Friday. Truss insisted “urgent action” was required to grow the economy and the cuts would help boost growth in the long term. “I’m prepared to do what it takes to make that happen,” she added in her first public comments since the mini-budget was announced. She insisted currencies were under pressure around the world, amid a wider global crisis in the aftermath of Covid-19 and the war in Ukraine.
When asked about the fairness of scrapping the 45% income tax band for top earners, Truss replied: “It’s not fair to have a recession.” In a Whatsapp exchange seen by the BBC, Kwarteng has sought to reassure Conservative MPs about his economic strategy and to ask for their support. “The path we were on was unsustainable - we couldn't simply continue to raise taxes,” he said. “However I totally understand the need to be credible with markets. We will show markets our plan is sound, credible and will work to drive growth.”
Meanwhile, Truss has agreed to meet other European leaders at the inaugural summit of the European Political Community (EPC). Proposed by French president Emmanuel Macron, it will take place in Prague, Czech Republic, on Thursday. Although the UK voted in 2016 to leave the EU, it is among other non-EU nations invited to join EU members to discuss security and energy. Macron proposed the EPC in May to serve as a “new space” for co-operation.
RUSSIA TO ANNEX 4 REGIONS OF UKRAINE
Russian president Vladimir Putin will hold a signing ceremony on Friday formally annexing the regions of Luhansk and Donetsk in eastern Ukraine and Zaporizhzhia and Kherson in the south. It comes after referendums were held in each region, with Russian-backed officials claiming they had secured almost total popular support. The referendums have been condemned as a sham by Ukraine and the West. Putin is set to make a major speech at the Kremlin, with a stage already being set up in Moscow’s Red Square.
Billboards have also been put up declaring the four regions as part of Russia, echoing Russia’s annexation of Crimea in 2014. This also occurred after a disputed referendum and was celebrated with a presidential victory speech. The US has said it will impose further sanctions on Russia due to the referendums, while the EU is considering an eighth round of measures. German foreign minister Annalena Baerbock claimed people in the occupied regions had been taken from their homes and workplaces by threat and even gunpoint.
“This is the opposite of free and fair elections,” said Baerbock. “And this is the opposite of peace, it is a dictated peace.” The referendums took place across 15% of Ukrainian territory last Friday with only a few days’ notice. Russian state media claimed the use of armed guards was for security purposes, ignoring the added effect it would have had on intimidating residents. One woman told the BBC: “You have to answer verbally and the soldier marks the answer on the sheet and keeps it.”
Michelle Pfeiffer paying tribute to the US rapper Coolio, who has died at the age of 59. Snoop Dogg also led tributes, posting a picture on Instagram of him and Coolio from the set of the music video for Gangsta Walk, a track they collaborated on in 2006.
Coolio – whose real name was Artis Leon Ivey Jr – was found unresponsive on the bathroom floor of a friend’s LA house on Wednesday, according to his manager Jarez Posey. The exact cause of his death is yet to be revealed. Coolio won a Grammy for the 1995 song Gangsta’s Paradise, which led the soundtrack for Dangerous Minds – a film starring Pfeiffer.
HOUSEHOLDS URGED TO READ METERS
Industry body Energy UK has advised households to read and submit their energy meter readings before Saturday ahead of the energy price cap increase from 1st October. This is to stop suppliers from estimating usage and charging a higher rate for energy used before Saturday, although most will allow for a few days leeway in light of the “unprecedented” situation. The price cap for the average annual household energy bill is set to rise by 27% from £1,971 to £2,500.
This cap has been frozen by the government until 2024 to try and limit the impact of soaring energy costs on ordinary households. However, it is based on the average household using 12,000 kWh of gas per year alongside 2,900 kWh of electricity per year. If households exceed this, they would be required to pay proportionately more.
MORTGAGE CHECKS TO BECOME STRICTER
Borrowers could be required to prove they can afford interest rates of up to 7% to qualify for a mortgage as lenders pull mortgage rates at a record pace. The Bank of England is expected to repeatedly raise interest rates in the wake of the continued financial fallout from chancellor Kwasi Kwarteng’s tax cuts package. The base rate could reach a peak of 5.5% by as early as next spring.
Raising interest rates have massive knock-on effects for would-be homeowners. Affordability rules require banks to test whether borrowers can afford a mortgage at 1% above future expectations of the base rate or their lender’s standard variable rate. This means borrowers may need to prove they can afford rates of up to 6.5-7%. The UK’s largest mortgage lender Halifax now has a standard variable rate of 5.74%.
ZAGHARI-RATCLIFFE CUTS HER HAIR
Nazanin Zaghari-Ratcliffe has paid tribute to Mahsa Amini by filming herself cutting her hair, amid 11 days of significant unrest in Iran following Amini’s death in custody. Amini was arrested on 13th September for allegedly wearing a hijab headscarf in an improper way. She then collapsed and died in hospital of sudden heart failure according to police, although Amini’s family have alleged she was beaten by officers.
“For my mother, for my daughter, for the fear of solitary confinement, for the women of my country, for freedom,” said Zaghari-Ratcliffe at the end of the video. She spent six years in jail in Iran herself until her release earlier this year. She was arrested in the Iranian capital Tehran in 2016 while working as a charity project manager, having been accused of spying by Iranian authorities – claims she has repeatedly denied.
BIDEN GAFFE OVER DEAD POLITICIAN
US president Joe Biden was involved in another gaffe after asking during a speech if deceased Congresswoman Jackie Walorski was in the audience, prompting renewed questions about his mental sharpness. “Where’s Jackie?” Biden asked while naming politicians who contributed to hunger relief in the US. Walorski was killed alongside two staff members in a car crash almost two months ago, sending shockwaves throughout Washington.
The White House said Walorski was “top of mind” for the president as he is due to meet her family today. On the day of her death on 3rd August, Biden issued a statement saying: ““Jill [Biden] and I are shocked and saddened by the death of Congresswoman Jackie Walorski of Indiana”. Biden is known for gaffes and stumbled in a speech in July when he erroneously read “repeat the line” – an instruction from his teleprompter.
HURRICANE IAN REACHES FLORIDA
Hurricane Ian has hit south-west Florida with high winds, rain and storm surges in one of the most powerful storms to ever strike the US mainland. More than 2m homes and business were left without power amid 150mph winds and a storm surge of up to 18ft on Wednesday afternoon. It has since weakened and moved inland, prompting a downgrade from a category 4 to category 1 storm.
Residential areas in Fort Myers Beach and other coastal cities were left almost completely submerged, as buildings were damaged and trees and power lines were brought down. Settlements in Ian’s path have been warned by utility company Florida Power and Light to expect days without power. “Pray for people,” said state governor Ron DeSantis. “This is going to be one of those historic storms […] and have a profound impact on our state.”
Hundreds of people have been queuing outside Windsor Castle to visit Queen Elizabeth II’s final resting place, as the monarch’s former home has reopened to the public following her death on 8th September. The Queen was buried with her husband Prince Philip, alongside her mother, father and sister in St George’s Chapel following her funeral. Buckingham Palace released a photo of the ledger stone on Saturday, marking the spot where the family is interred.
Picture of the day
An aerial picture was taken by the Swedish coastguard showing the release of gas from a leak on the Nord Stream 1 gas pipeline, which is believed to have been caused by sabotage. The EU and US have refrained from directly accusing Russia of causing the gas explosion, while Ukraine accused Russia of having conducted a “terrorist act”.