The front pages of tomorrow’s national newspapers in the UK have started to be published, with the focus on Jeremy Hunt’s U-turn announcement today.

The Guardian has the story of Hunt tearing up the economic plans that have defined Liz Truss’ time as prime minister.

The photograph of former leadership candidates Penny Mordaunt and Hunt sat next to Truss and her deputy Thérèse Coffey tells a story in itself.

The Sun is perhaps one of the most scathing, calling Liz Truss “The Ghost PM” after she did not answer the urgent question in parliament, and then sat next to Jeremy Hunt as he delivered his statement on the changes in economic policy.

The Telegraph leads with Hunt’s statement to the Commons, saying that he would not rule out a windfall tax, that energy bills could go up for families after all from April and the plans to get rid of Truss continue.

The i has the view of Hunt taking control of the direction of policy, as Truss faces “48 hours” to save her premiership.

Business freesheet newspaper City AM has an image of a tombstone with “Trussonomics … laid to rest by Jeremy Hunt” adorning it.

And finally, regional newspaper from the North East The Daily Echo leads with the U-turn from Jeremy Hunt but it also carries an interview with Labour leader Sir Keir Starmer where he says he will “pick up the levelling up agenda and make it happen”.

Liz Truss has apologised for going “too far and too fast” with the economic policies in her “mini-budget” and has accepted responsibility for the problems created by it.

The prime minister refused to say whether her vision for Britain was “dead”, during an interview with BBC political editor Chris Mason but admitted that she had made mistakes. She also said that she would lead the Conservative party into the next general election.

Truss said: “I do want to accept responsibility and say sorry, for the mistakes that have been made. I wanted to act but to help people with their energy bills to deal with the issue of high taxes, but we went too far and too fast. I’ve acknowledged that. I put in place a new chancellor with a new strategy to restore economic stability.

“I recognise that we did act too fast, and that’s why I’ve adjusted what we’re doing and I do think it is the mark of an honest politician who does say, yes, I’ve made a mistake. I’ve addressed that mistake. And now we need to deliver for people, you known what we’ve said we’ll deliver.”

Truss admitted that government policies have made things harder for families and their ability to pay their mortgages, the repayments on which have risen since Truss and Kwasi Kwarteng’s “mini-budget”.

“I have said sorry for the fact that we did act too far. We went too far and too fast … The reason I did that was to make sure that we were dealing with the immediate issue of the energy crisis. And we did help people with their energy bills.”

The prime minister sought to reassure vulnerable families that they would still get support with their energy bills, despite another U-turn on Monday that the government finance in place that keeps the average bill for a household to £2500 would only be universally available until April.

“I can can reassure people off is that the most vulnerable will be protected into next winter. We’re looking at exactly how we can do that. And being in government is always about a balance or being able to make those decisions but I also have to think about and the chancellor has to think about economic stability. So we will make sure those households who are struggling, do have that support into next winter. We’ll be saying more about that in due course,” she said.

Truss repeated her campaign’s central pledge that she is focused on growth, and emphasised that she had been “upfront and honest” with her apology and undoing the policies she had Kwarteng had introduced.

“Well my message to my colleagues is yes, I completely acknowledge that there have been mistakes. I have acted swiftly to fix those mistakes. I’ve been honest about what those mistakes were. And what we now need to do is move forward and deliver for the country because that’s ultimately, that’s ultimately what people care about. People care about us delivering and that’s what we as elected politicians need to focus on.”

Cabinet members are arriving at Downing Street for a drinks reception with Liz Truss.

Business secretary Jacob Rees-Mogg, fresh from his appearance in the Commons for the second reading of the energy bill, said Truss should “absolutely not” resign. “[She is] a very good prime minister,” he told PA Media.

Foreign secretary James Cleverly, leader of the House of Commons Penny Mordaunt, Tom Tugendhat, chief whip Wendy Morton and culture secretary Michele Donelan have also been seen arriving.

US president Joe Biden’s press spokesperson Karine Jean-Pierre has said he did not regret his criticism of Liz Truss’ “mini-budget”.

During a visit to an ice cream parlour in Oregon he said it was “predictable” she had to U-turn on her policies. The comments into the domestic policy of its ally were seen as being highly unusual.

Biden said: “I wasn’t the only one that thought it was a mistake.

“I think that the idea of cutting taxes on the super-wealthy at a time when … I disagree with the policy, but it’s up to Britain to make that judgment, not me.”

Jean-Pierre was asked whether Biden regretted it today by Jeff Mason, Reuters’ White House Correspondent.

“No”, Jean-Pierre said.

The first signs of what Liz Truss told the One Nation group of Conservative MPs this evening are emerging, after party chairman Jake Berry spoke to journalists outside the meeting.

Berry said there had been a focus on “unity”.

“The prime minister started by saying that mistakes have been made, she acknowledged them, she is bringing the party together,” PA Media reported.

“Colleagues who were there [were] very heavily focused on unity. Matt Hancock made a really good intervention, saying that now is the time for unity, we’ve got to get behind the PM.”

Liz Truss was meeting Sir Graham Brady, chair of the 1922 Committee, during the urgent question on the sacking of the chancellor, which Labour said she should have been answering personally, my colleague Pippa Crerar reports.

Back in the Commons John McDonnell, the former shadow chancellor, asked Jeremy Hunt for an assurance that benefits will be uprated for next year in line with inflation. Like Alison Thewliss, he cited the recent research suggesting austerity contribute to 330,000 excess deaths.

Hunt said that he could not make that announcement now. But he hinted that he was minded to uprate in line with inflation, saying:

I hope that [McDonnell] is reassured that I have been very clear about the values through which we will take those decisions. (See 4.36pm.)

Ed Davey, the Liberal Democrat leader, asks if Hunt will implement a genuine windfall tax.

Hunt replies:

I am not against the principle of taxing profits that are genuine windfalls.

But, in the energy industry, it is a very cyclical industry. There are businesses that have periods of feast and famine and you have to be very careful that you don’t tax companies in a way that drives away investment.

So we have said that nothing is off the table.

This is very different from what Liz Truss said when asked about a windfall tax on energy companies at her first PMQs. She said:

I am against a windfall tax. I believe it is the wrong thing to be putting companies off investing in the United Kingdom, just when we need to be growing the economy.

The implication from what Hunt told MPs was that his view on this policy, not Truss’s, is now determining government policy.

Hunt is replying to Reeves.

He says, behind the rhetoric, he does not think Reeves disagreed with any of the decisions he announced. He says he thinks that is important for the markets to know.

He accepts that some decisions have been changed. But he rejects Labour’s “broader narrative” about Tory economic mismanagment. Unemployment is lower than at any time since 1974. And the growth rate since 2010 has been the third highest in the G7, he says.

And he claims the Tories protected the NHS throught one of its most difficult periods ever, after the financial crash. And the Tories then gave it its biggest spending increase ever.

He says the true test will come in two weeks’ time, when Labour has to decide it it backs spending restraint.

He ends:

I’ve shown Conservatives can raise taxes. Will [Reeves] show if Labour are willing to restrain spending?

Reeves says the Tories have run out of credibility, “and now they are running out of chancellors”.

Jeremy Hunt was a big part of austerity season one, she says. And now he says the answer is austerity season two.

She says that Hunt, when he was standing for Tory leader, wanted corporation tax to be cut to even lower than it is now.

People will be paying a “Tory mortgage premium” for years to come, she says.

She agrees with Hunt that the country needs stability. But where does Hunt think the instability came from?

Jeremy Hunt starts by stressing the importance of economic stability. The wording is similar to that from his statement this morning.

He says the government will have to take decisions of “eye-watering difficulty”.

But the government will take those decisions so that any spending cuts or tax increases are decided in accordance with “core compassionate conservative values”.

Mordaunt says, again, there is a “genuine reason” why Truss is not here. She says she hopes Truss will be in the chamber later.

Dame Margaret Hodge (Lab) asks Mordaunt to explain why Truss is not here. She says, for the sake of market confidence, it is important for people to know.

Mordaunt says she cannot say. She says she did ask if she could, but she cannot disclose the reason, she says.

In response to a question from Labour’s Stella Creasy, Mordaunt declared: “The prime minister is not under a desk.” Creasy suggested Liz Truss was “cowering” under one.

She says says Truss is not here “for a very good reason”.

There is speculation on social media that Truss may have rushed off to Ukraine, copying a favourite Boris Johnson tactic faced with domestic mayhem.

Ed Davey, the Lib Dem leader, asks Mordaunt if she will apologise to the public for what has happened.

Mordaunt replies:

I am sorry that the events leading to the changes today have added to the concerns about the major volatility that was already there existing in the economy. That’s why we are putting it right today.

Mordaunt starts by saying she does not think Starmer will get his 15 minutes as prime minister.

She pays tribute to the “courage” shown by Liz Truss in changing course.

The decision taken by our prime minister would have been a very tough one, politically and personally. Yet she has taken it, and she has done so because it is manifestly in the national interest.

She did not hesitate to do so because her focus is on the wellbeing of every one of our citizens.

It was the right thing to do and, whether you agree with this or not, it took courage to do it.

She says Starmer did not need courage to table today’s UQ. And she attacks Starmer for opposing Brexit.

Starmer thanks Mordaunt for replying. He says under this government everyone gets to be prime minister for 15 minutes.

The government has lost control, he says.

Government borrowing costs have soared, mortgage rates have ballooned, markets need reassuring, and there is long-term damage that can’t be undone.

Once you’ve crashed the car at 100 miles an hour, you’ve damaged it for good, and you’re going to be paying much more on your insurance for years to come.

Keir Starmer asks his UQ. He starts by just asking “the prime minister” to make a statement on the replacement of the chancellor.

Penny Mordaunt, the leader of the Commons, starts by saying Liz Truss is “detained on urgent business” and that MPs will have to make do with her.

She says Jeremy Hunt, one of the “longest serving and most experienced parliamentarians”, has been made chancellor.

Penny Mordaunt, the leader of the Commons, will soon be answering an urgent question from Labour’s Keir Starmer on the sacking of Kwasi Kwarteng as chancellor. Starmer wanted Liz Truss to reply, but she has sent Mordaunt to face MPs instead.

The sacking of Kwarteng seems particularly unfair in the light of a report in the Mail on Sunday yesterday by Glen Owen saying it was Truss who forced Kwarteng to include the abolition of the top rate of tax in the original mini-budget – despite his misgivings. Owen reports.

Now sources have claimed that the most contentious policy, the proposed cut in the top rate to 40p, was effectively forced on Mr Kwarteng after he suggested to Ms Truss that it should be delayed until next year to avoid ‘doing too much at once’.

The PM is understood to have said: ‘No – let’s go for it.’

When this newspaper asked Mr Kwarteng after the mini-budget whether Ms Truss had ‘bounced’ him into the cut, he paused before responding: ‘I think we were agreed on that.’

Owen also says separate sources have also claimed that “Kwarteng had agonised before deciding whether to back Truss in the leadership contest earlier this year.” Owen says:

They say he confided that he was worried about her candidacy on the grounds that she was ‘a bit crazy’.

The Institute for Fiscal Studies, an economic thinktank, has described mini-budget 2, this morning’s statement from Jeremy Hunt reversing most of the tax cuts in the original mini-budget, as a big, welcome step “in the right direction”. But it also says the £32bn in extra taxation will not by itself “plug the gap” in the government’s balance sheet.

In a press release setting out the IFS analysis, Paul Johnson, its director, says:

Fiscal credibility is hard won but easily lost. Today’s announcements won’t be enough, by themselves, to plug the gap in the government’s fiscal plans. Nor will they be enough to undo the damage caused by the debacle of the last few weeks. But they are big, welcome, clear steps in the right direction. It is also encouraging that, with most of the tax cuts abandoned, perhaps the most growth-friendly of them, the stamp duty cut and the increased annual investment allowance for corporation tax, remain.

Backing this up with a coherent set of well-designed fiscal targets and a credible plan for meeting them is now the priority for the chancellor’s statement on 31 October. Jeremy Hunt will still have to make some scary decisions on tax and spend this Halloween. And it remains hard to see where significant spending cuts could come from. With today’s policy reversals the tax burden is again set to rise and stabilise at an historically high level.

The IFS also says the fiscal plan being published on 31 December is likely to involve “some cuts to planned investment and day-to-day spending”.

Penny Mordaunt, the leader of the Commons, will respond to the Labour urgent question for Liz Truss on the sacking of Kwasi Kwarteng (see 1.02pm), Tory sources have confirmed. Labour sources say this shows Truss is “frit” (a Lincolnshire word for frightened, used by Margaret Thatcher to taunt Michael Foot in 1983).

It is no surprise that Truss would rather not take questions from Starmer and other MPs on this, but it is not unusual for a prime minister to send someone else to answer an urgent question. It is what normally happens.

Jeremy Hunt was not the only leading UK politician addressing the media this morning. In Edinburgh Nicola Sturgeon, Scotland’s first minister, gave a news conference to mark the publication of the latest paper from the Scottish government making the economic case for independence. Sturgeon said that it was “glaringly obvious now that the UK does not offer economic strength and stability or financial security”. In another reference to the turmoil in London, she said:

There can’t be many, if any, who look at Westminster now and think that this is as good as it gets.

The full 110-page paper is here. It accepts that, if an independent Scotland were to join the EU (as the SNP wants), and the rest of the UK were to remain outside the single market, there would have to be a trade border between England and Scotland. It says:

Sharing responsibility for customs checks is something that happens on the Norway-Sweden border and, together with the use of technology, has the result that most goods traffic travelling across the border are cleared by customs within three to nine minutes.

Any actual physical checks would likely only be undertaken on the two main trunk routes between England and Scotland or at rail freight terminals.

At the Downing Street lobby briefing the prime minister’s spokesperson brushed aside claims that Liz Truss has nothing left to deliver on, given that so many of the policies she set out during the Tory leadership campaign have been abandoned. Truss was focused on growth, the spokesperson said.

Asked what credibility Truss now has as PM, the spokesperson said she was committed to providing economic stability. He said:

The prime minister is listening to the public. She is listening to advice on the markets, she is listening to her colleagues and she is making the necessary difficult decisions to change our approach so that we can provide the economic stability and indeed maintain that stability of leadership which is important …

The prime minister is demonstrating that she is able to make the difficult decisions necessary to provide the leadership for this country.

Truss also stressed the importance of stability in a tweet put out under her name.

This is quite a reversal. In her party conference speech, less than two weeks ago, Truss depicted herself as the agent of “change” and “disruption”.

The Speaker, Sir Lindsay Hoyle, has granted a Commons urgent question to Labour about the sacking of Kwasi Kwarteng. Keir Starmer has tabled the question, and he wants Liz Truss to attend in person to answer.

But there is no guarantee that Truss will appear. She may get another minister to answer on her behalf, like Nadhim Zahawi, the Cabinet Office minister, or Brendan Clarke-Smith, a more junior Cabinet Office minister.

On the BBC’s Politics Live a few minutes ago Jonathan Reynolds, the shadow business minister, claimed that if Truss was not able to answer a question like this herself, it was “over” for her.

The UQ will come at 3.30pm. Starmer will be speaking, regardless of who is responding for the government. Jeremy Hunt will deliver his statement afterwards, at around 4.30pm.

Investors are welcoming Jeremy Hunt’s decision to ditch most of the mini-budget, and rein in the costs of the energy price cap, my colleague Graeme Wearden writes on his business live blog. Graeme says:

The pound is holding its earlier gains, still up around one cent at $1.127.

And UK bonds are on track for one of their best days in decades, as Jeremy Hunt scrapped most of the unfunded tax cuts that had undermined confidence in the UK.

The yields on the 30-year gilt dropped by nearly 40 basis points to 4.385%, marking one of its biggest daily drops on record, Reuters reports.

Bond prices had already strengthened sharply before Hunt took to the air, particularly following reports that the energy cap was being cut back.

And these are from Newsnight’s Ben Chu.

There is more on the business live blog.

Here is the Treasury news release with details of the mini-budget rewrite announced by Jeremy Hunt at 11am. Arguably this is one of the biggest tax-raising announcements in Treasury history, raising £32bn by 2026-27, although most of these tax increases are simply reversals of tax cuts that were never implemented anyway.

The table also shows that there have now been seven mini-budget U-turns.

This Treasury chart sets out how much will be raised by each of the U-turns.

Labour says the energy price guarantee U-turn makes it even harder to understand why the government won’t back its plan for a new windfall tax on energy companies. These are from Rachel Reeves, the shadow chancellor.

In his statement Jeremy Hunt also confirmed that public spending would be cut in “some areas”. He said:

There will be more difficult decisions, I’m afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.

All departments will need to redouble their efforts to find savings and some areas of spending will need to be cut.

But as I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.

This is what Jeremy Hunt said in his statement about the energy price guarantee.

The biggest single expense in the growth plan was the energy price guarantee.

This is a landmark policy supporting millions of people through a difficult winter, and today I want to confirm that the support we are providing between now and April next year will not change.

But beyond that, the prime minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.

So I’m announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.

Hunt confirms that the energy price guarantee, as originally announced, will only last until April.

He says Liz Truss agreed that it would be wrong to make such a long-term spending commitment, when it is unclear what will happen to energy prices in the future.

He says there will then be a review. A more targeted system will then be put in place, he says.

This is the big surprise in today’s announcement. It will probably go down well with the markets. But this cuts the knees from under Liz Truss. The only policy that she had left that she was able to take credit for – see 11.04am – has now gone into the shredder. There is nothing left of the Truss agenda at all.

Jeremy Hunt is speaking now.

He says a central responsiblity for any government is economic stability.

No government can control the markets. But every government can give certainty about the sustainability of the public finances.

He says, as well as going ahead with the corporation tax increase, he is announcing other changes.

He is doing so now ahead of a statement to MPs.

We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not [already started the parliamentary process].

He says this includes:

• Cuts to dividend tax rates

• The IR35 tax changes

• VAT-free shopping for tourists

• The alcohol duty changes

Hunt also says the 20% basic rate of tax will remain indefinitely.

He says these measures will raise an extra £32bn per year for the Treasury

UPDATE: Hunt said:

We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.

So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates.

Hunt also said the basic rate of income tax could remain at 20p in the pound until economic conditions allowed a reduction. He said:

It is a deeply held Conservative value - a value that I share - that people should keep more of the money that they earn.

But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.

In the light of what journalists like Hary Cole and Steven Swinford are reporting about the energy price guarantee policy being revised, this is what Liz Truss said at PMQs five days ago.

We have taken decisive action to make sure that people are not facing energy bills of £6,000 for two years. We remember that the opposition are only talking about six months. We have also taken decisive action to make sure that we are not facing the highest taxes for 70 years in the face of a global economic slowdown …

The fact is that all the opposition have said is that people should be supported for six months. Does he think that, in March, pensioners should be facing very high energy bills? That is what will happen if he does not support our energy price guarantee.

Jeremy Hunt, the new chancellor, is about to announce changes to the mini-budget.

He is speaking to the media, and not waiting to address parliament at 3.30pm, because he wants the markets to hear what is happening asap.

• Penny Mordaunt, the leader of the Commons, has written an article for the Daily Telegraph saying Tory MPs should “work with the prime minister and her new chancellor”. In its splash the Daily Telegraph writes this up as Mordaunt being supportive of Truss. But in her article Mordaunt barely mentions Truss and instead she stresses the importance of “pragmatism” (she uses the word three times) and much of the article reads like an indictment of Truss’s approach to politics, not an endorsement of it. For example, Mordaunt says:

This land of ours is full of stories of those in our communities - national or local, large and small - that have risen to challenges. That have stayed the course or made improvements. Our characteristic hopeful pragmatism has provided stability. It has ensured extremism has never taken hold …

We must remember what we have achieved and how we did it. Above all, it was down to a commonsense approach. Pragmatism must always take precedence over policy. The Conservative party understand this. If it has a fault, it’s that it’s impatient to get on with it.

There is a talented team of energetic and dedicated public servants at every level of government in this country. They are matched by leaders in just about every field of human endeavour. They know the problems we face are difficult and complex.

The national mission though is clear, as the prime minister said. That is what we should all focus on now. It needs pragmatism and teamwork. It needs us to work with the prime minister and her new chancellor. It needs all of us.

Mordaunt, of course, is another of the Tories seen as a potential replacement for Truss. The Telegraph may have published her manifesto.

• Steve Baker, the Northern Ireland minister, has told ITV’s Anushka Asthana that Tory MPs hoping to remove Truss are not being realistic.

• George Osborne, the former Tory chancellor, has described Truss as PINO – prime minister in name only. He told the Andrew Neil Show last night that he thought Truss would probably be gone by Christmas. (To be fair, he said much the same about Theresa May just after the 2017 election, but was out by about two years.)

• MPs believe that as many as 100 Conservative backbenchers may have written no-confidence letters demanding a vote on whether to depose Liz Truss, Hugo Gye and Chloe Chaplain report for the i.

• Ben Wallace, the defence secretary, has indicated that he will withdraw support for Truss if she reneges on her promise to raise defence spending to 3% of GDP, Jason Groves reports for the Mail.

• Grant Shapps, the former transport secretary, has written an article for the Times saying Tory defeat at the next election is not inevitable. He says:

I am a contrarian. If someone tells me that such and such is so, I say “prove it”. So, the doomsters say the Tories are finished. The consensus is that Labour’s 20 to 30-point lead is unassailable. I say, look at Theresa May’s poll lead before the 2017 election. She was 23 points ahead with two months to go and managed to blow that lead entirely, resulting in a minority Tory government. We have two years to go and we can do a hell of a lot of good in two years.

But we have to bin the infighting and ideology and rediscover core Conservatism: a desire to preserve that which is good, an aversion to unnecessary state interference in people’s daily lives, a belief in the liberating power of free enterprise. We must demonstrate compassion for the vulnerable, and maintain an unwavering belief in the greatness of this nation and its value to the wider world as a force for good.

Nothing in politics is written in stone. Precedents are there to be broken. Can the Conservatives win a fifth term? Of course we can. So long as we remember why we were elected.

Judging by what Conservative MPs have been telling journalists in private over the last few days, the consensus (but not unanimous) view among Tories seems to be that Liz Truss will have to be replaced as party leader before the next election. But very few MPs are saying that in public, and Sky’s Tom Larkin, who is running a spreadsheet of Tories calling for Truss’s resignation, has only got three names on it.

Damian Green, the former first secretary of state, was on the Today programme and you would expect him to be on the Larkin list. He is chair of the One Nation Conservatives caucus, the group most horrified by Truss’s experiment with hardline free market ideology. But he insisted that Truss did have the credibility to carry on as PM, despite the fact she is abandoning most of the key tax policies at the heart of her leadership campaign. He explained:

She is a pragmatist - she’s realised that the first budget didn’t work in spectacular fashion, so she’s now taken the sensible view that we will now try something else, and she’s appointed a very sensible chancellor in Jeremy Hunt.

I obviously don’t know what he’s going to say, but clearly what he’s going to do is already beginning to reassure the markets, and I hope will continue to do so afterwards.

That means we can hopefully put the past few weeks behind us and start again.

Green said the public would look “pretty askance” if the Tories staged another leadership election and that what was best for the country was for the government to succeed. Asked if he wanted Truss to lead the party into the next election, Green replied:

Yes, because if she leads us into the next election, that will mean that the next two years have been a lot more successful than the past four weeks have been. That would not only be good for the Conservative party, that would be particularly good for the country as well, so I think everyone would welcome that.

That sounded like Green saying he wanted Truss to stay on as PM until the next election. But in fact what he was actually saying was that Truss would only be able to stay on if her premiership became “a lot more successful”.

Labour has called for Liz Truss’s resignation. In an interview with Sky News, asked if Truss should quit, Pat McFadden, the shadow chief secretary to the Treasury, said:

We think she should go because she has got no credibility, no authority. She caused this damage, she was 100% co-owner of that mini-budget with Kwasi Kwarteng and therefore if she stays in post, why is she staying in post? It can’t be for the interests of the country. This is just the Conservative party looking after itself today and they cannot fix the damage they have caused.

The initial response from the markets this morning to the news that mini-budget 2 is coming two weeks early was positive, according to Sky’s Paul Kelso.

And this is from Henry Tapper at AgeWage.

And this is from my colleague Graeme Wearden.

The bond market is open … and UK government borrowing costs are falling.

That suggests the City is welcoming Jeremy Hunt’s push to unravel the mini-budget with new tax and spending plans.

The yield, or interest rate, on 30-year government bonds (or gilts) has dropped sharply to 4.55%, down from 4.77% on Friday night.

Yields measure the cost of government borrowing, and fall when bond prices rise (and vice versa).

Graeme has more on his business live blog.

Good morning. Jeremy Hunt declared that he had a “clean slate” to overhaul the disastrous mini-budget after he was appointed chancellor on Friday, and this morning he is going to deploy it, making a statement consigning yet more of the measures announced by his predecessor, Kwasi Kwarteng, to the dustbin.

Announcing Hunt’s appointment, Liz Truss confirmed that the government was going ahead with the corporation tax increase that had been cancelled in the mini-budget. But that was not enough to convince the financial markets that the government had spending under control and on Friday afternoon gilt yields were going up (meaning government borrowing costs were rising). Ministers were braced for more trouble with the opening of the bond markets at 8am this morning.

Instead Hunt has decided to get ahead of events. At 6am this morning the Treasury said he would be making a major statement about tax and spending policy. He will be in the Commons at 3.30pm to give details to MPs, but reassuring the financial markets takes precedence over the convention about big announcements being made in the chamber first, and so Hunt will be releasing the details at 11am.

Labour has called this “evidence of panic”. Pat McFadden, the shadow chief secretary to the Treasury, told the Today programme:

I think it’s evidence of the panic that the government is in and that damage that’s been caused over the past few weeks.

Clearly, ministers are now terrified of market reaction. They’ve concluded that they cannot wait until October 31.

In its own terms, that’s right because the country couldn’t carry on for the next two weeks in the way that we’ve been going, but the key thing is where does this now leave the prime minister? She was elected to lead the Conservative party on the basis of the policies that were announced by the previous chancellor on September 23 [in the mini-budget].

It is hard to know what to call Hunt’s statement, but “revised mini-budget”, or “mini-budget 2” would work as acceptable shorthand. Kwarteng said that he would follow his mini-budget with a “medium-term fiscal plan” that would explain how the tax cuts in the mini-budget would be funded. He was going to set out new fiscal plans, and explain what would happen to spending (not covered in the original statement).

Today Hunt is expected to delay or scrap some of the mini-budget measures that have not already been binned. The cut in the basic rate of income tax by 1p in the pound, that was due to take effect from April next year, will almost certainly be shelved.

But he is also expected to give details of the spending cuts that will be needed to balance the government’s books. (See 8.19am for an update on this point.) He gave a hint of what to expect over the weekend when he said:

We are going to have to take some very difficult decisions both on spending and on tax. Spending is not going to increase by as much as people hoped and … taxes are not going to go down as quickly as people thought and some taxes are going to go up.

Today’s statement will not entirely replace the fiscal plan, due to be published on 31 October. That is still going ahead, and the Treasury confirmed this morning that that is when the Office for Budget Responsibility will publish its economic forecast – its assessment of the credibility of the government’s plans.

Hunt’s move is primarily about assuring the financial markets. But the political markets need reassuring too. The Liz Truss share price hit rock bottom at the weekend and many Conservatives think that, if Tory MPs can agree on a candidate to replace her, she will be out. Today we may get a better sense of whether or not that is imminent.

Here is the agenda for the day.

11am: Jeremy Hunt will making his statement about changes to the mini-budget.

11am: Nicola Sturgeon holds a press conference in Edinburgh as she publishes the latest paper from the Scottish government making the economic case for independence.

2.30pm: Simon Clarke, the levelling up secretary, takes questions in the Commons.

After 3.30pm: Hunt makes a statement to MPs about his mini-budget overhaul.

4.3pm: MPs hold a debate in Westminster Hall on an e-petition signed by more than 600,000 people calling for an early election.

After 5pm: MPs debate the energy prices bill

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