Good evening. Britain's economic expansion will be the fastest in the G7 this year according to the IMF – but inflation will be worse than other advanced countries. It has also warned of a global house price crash.
Evening briefing: Today's essential headlines
Lucy Letby trial | A mother walked in on Lucy Letby trying to murder her baby but was told "trust me, I'm a nurse", a court was told. Nurse Ms Letby, 32, is on trial at Manchester Crown Court charged with murdering seven babies and attempting to murder 10 others in the neonatal unit in the Countess of Chester Hospital. She denies all the charges against her.
- Madeleine McCann | Prime suspect charged with sexual offences
- Just Stop Oil | Drivers drag protesters from street as fire crew blocked
- Indyref2 | Sturgeon can hold vote as it would be 'advisory', court told
- Duchess of Sussex | Labelling women 'crazy' ruins their 'careers'
- Watch | Larry the Cat chases off a fox outside Number 10
The big story: Mini-Budget will boost growth, says IMF
Kwasi Kwarteng's tax cutting mini-Budget will help Britain to be the fastest growing major economy this year at the cost of higher long-term inflation, the International Monetary Fund (IMF) has said.
Strong momentum at the end of 2021 means UK economic growth will outpace the rest of the G7 this year.
Tax cuts announced in the mini-Budget are expected to lift it even higher than the IMF's current forecast of 3.6pc, which was published today but finalised before the Chancellor's plans were announced.
However, inflation is expected to remain stubbornly high. The IMF expects UK prices will rise faster than any major advanced economy over the next two years, even as investors bet on interest rates rising well above 5pc next year.
Rachel Reeves accused Mr Kwarteng of "sabotaging" the UK’s "economic credibility" as they clashed over the Government's mini-Budget.
The shadow chancellor claimed that Mr Kwarteng was in a "dangerous state of denial" as she told the House of Commons the "costs of these mistakes are all too real for everyone else".
Earlier, the Bank of England was forced to expand its intervention in UK bond markets again as it warned that the threat of a gilt "fire sale" poses a "material risk" to financial stability.
Today the Government has borrowed at its highest interest rate since the depths of the financial crisis as its debt interest bill was sent soaring by the market turmoil.
All this comes as data show Britain's jobs market was hamstrung by record levels of long-term sickness in the three months to August as huge NHS backlogs and long Covid forced more people to drop out of the workforce.
To make matters worse, new analysis shows taxpayers would be £600 better off come 2025 if the Government unfroze income tax thresholds rather than cut the basic rate of tax.
Mike Warburton analyses how Mr Kwarteng made a serious mistake and must reverse course.
Fed capitulation
Britain’s economic struggles come during a turbulent time for the world economy.
The chief executive of America's biggest bank has said the US is heading for recession within months, as he warned of "a very, very serious" mix of headwinds.
Jamie Dimon, the head of JPMorgan, said that untamed inflation, rising interest rates, and Russia's war in Ukraine are likely to tip the US into recession by the middle of next year.
However, Ambrose Evans-Pritchard says there are reasons to rejoice, outlining how we may be very close to Fed capitulation on monetary tightening.
House price crash
Meanwhile, the IMF said the world faces a house price crash as rising interest rates make getting on or moving up the ladder unaffordable.
The Fund warned that housing markets were now at a "tipping point" after surging by more than 20pc during the pandemic.
It warned that rising mortgage rates would price many out of the housing market, with the biggest risks facing China and other emerging markets.
Mortgage rates have soared at four times the fastest rate on record since Mr Kwarteng's mini-Budget but there may be help for landlords, who could be able to continue to evict tenants without reason after reports the Government is discussing putting legislation to ban so-called "no-fault" evictions on ice.
Comment and analysis
- Ben Marlow | UK risks nuclear error repeat as Germany forges ahead
- Alan Cochrane | Unionists must wake up to truth about Sturgeon
- Tom Harris | Sturgeon has already given up on Scottish democracy
- Charles Moore | Biden is playing with nuclear fire by posing as JFK
- Michael Deacon | In these tough times, think of Meghan and Harry
Around the world: Leading surgeon killed in air strike
One of Ukraine's top children's cancer surgeons was killed on Monday after dropping off her five-year-old at nursery as Russia showered rockets on Kyiv. Dr Oksana Leontyeva was killed in her car as she "hurried to see her patients" when the shelling struck a busy boulevard in the city centre, her hospital said. It came as the UK's spy chief has said the West may not see a Russian nuclear attack coming. Meanwhile, the EU's foreign policy chief has warned his diplomats they are too slow as he said Brussels was losing the propaganda war with Russia and China.
Tuesday big-read
Burgers after the game and bottom of the table: Welcome to Wayne Rooney's America
Having left his family behind in England, the DC United manager is maturing as a leader — and can still hold his own in training
Sport briefing: England call-up for 18-year-old Ahmed
Rehan Ahmed, the 18-year-old Leicestershire leg-spinner, is on the verge of being involved in his first senior England squad next month, despite only playing three first-class games. It comes as Alex Lees faces a nervous wait to learn if he will continue his Test opening partnership with Zak Crawley after being left off the 30-strong list of national contracts for the coming year. Mike Ashley, the former Newcastle United owner, is understood to have held talks about buying Wasps. Meanwhile, Erling Haaland has revealed the secrets of the 6,000 calorie a day diet that has helped to turn him into Europe's most prolific goalscorer.
Editor's choice
- Escape the European gloom | Why this is the world's most underrated winter sun option
- Marriage Diaries | I'm sick of caring for my elderly husband
- We can all be collectors | Meet the woman taking on snobbery in the art world
Business briefing: Heathrow in talks over flight limits
Heathrow is in talks with airlines to bring back passenger restrictions over Christmas as bosses scramble to avoid a repeat of this summer's travel chaos. In a move that will reduce the number of flights and force fares up, the airport has proposed implementing "a seat factor cap" during the busiest days of the Christmas period, according to industry sources. The restrictions are designed to prevent Britain's busiest airport being overwhelmed during the festive season. It comes as passenger restrictions at the airport are due to be removed at the end of this month as the airport enters the typically quieter winter period.
Tonight starts now
Robbie Williams live | Understated entrances are not Robbie Williams's thing. The singer's introduction to his XXV show at London's O2 Arena was as swaggering as anything he has ever done. Twenty-five years and a week since the release of his solo debut, Life Through a Lens, this look back at Williams's career – a "mystical odyssey", he called it on stage – showed a man still with an endless appetite for applause, and a particular skill in getting it. Touring the UK until Nov 1, performing his hits from his Take That and solo days, he rampages gloriously down memory lane.
Three things for you
- Watch | Beneath the Surface: Storyville, BBC Four, 9pm
- Books | On the trail of Cormac McCarthy
- Play | Telegraph Puzzles featuring today's crosswords and sudoku
And finally... for this evening's downtime
Amazon Prime Day tips | Yes, it is here again. In fact, as you will remember from the first one back in July, Amazon Prime Day is actually two days. The 48-hour sale began at 12:01am this morning will end at 11:59pm tomorrow night. Read our pick of the best deals.
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