Inside Politics: 'Significant risk to UK financial stability'

Hello, I'm Matt Mathers and welcome to The Independent's Inside Politics newsletter.

Warning! The anti-growth coalition came out strong this morning. Its members could sell you coffee, drive your train, teach your kids or even look after your grandmother.

In the bubble

Chief political commentator John Rentoul on what 'Watch:

The cabinet is meeting this morning, with all ears on whether Liz Truss will back down on the idea of ​​cutting benefits. She will join a call with G7 leaders to discuss Ukraine at 1 p.m. The House of Commons returns from its party conference break at 2.30 p.m., beginning with Treasury Questions. Kwasi Kwarteng, the Chancellor, will then introduce the Health and Social Care Tax Repeal Bill, reversing the rise in National Insurance contributions and cutting them further, which will go through all its stages in one day. Labor does not oppose it.

Last briefing from the anti-growth coalition

Liz Truss and Kwasi Kwarteng will this week try to regain control of the narrative on the economy and further flesh out their There however has two stories to report this morning which spell bad news for Numbers 10 and 11 Downing Street, ministers in charge of government departments and by extension just about everyone else in the country.

The first comes in the form of a new analysis by the respected Institute for Fiscal Studies think thank, which tells the Chancellor that he will or will have to implement "significant and painful" spending cuts if he is to return the country's finances on a sustainable path.

The IFS predicts that the UK will be in recession until 2024 (the Prime Minister and Kwarteng have set a growth target of 2.5% of here there). Due to a weaker economy and less money in treasury coffers due to said tax cuts, the IFS calculates the government would need to spend £60bn less a year by 2026- 27. He also warned that departments would have to find cuts of around 15% if funding for the NHS and defense were earmarked.

The Treasury, which is, with No 10, apparently "to listening mode," said his tax cuts and reforms would ensure "sustainable funding for public services." The problem is that we still do not have a precise idea of ​​what these reforms will look like, although the Chancellor has tried to answer this problem in part by advancing the date on which he said that he would release his media budget eventually -

The second story, which is making the front page of Financial Time, is that the cost of government borrowing soared again yesterday after a British gilts sold off as the Bank of England prepares to wrap up its market intervention on Friday. The BoE was spooked enough by the developments to issue the announcement that it will further bolster its emergency bond-buying plan, as it warned that a continued rout in the gilt market poses a "significant risk to the financial stability of the United Kingdom".

"These additional operations will serve as an additional safety net to restore orderly market conditions by temporarily absorbing the sale of indexed gilts in excess of the capacity of market intermediation, the BoE said. "As with conventional gilt purchases, these additional index-linked gilt purchases will be time-limited and fully compensated by HM Treasury."

I warned you that it is in force today.

Labour Land

MPs will vote today on Truss' commitment to reverse the rise in insurance contributions national ance, which will pass with the help of the Labor Party, as my colleague John Rentoul noted above. The opposition will, however, step up their efforts to call on the government to reverse just about every other aspect of Kwarteng's "disastrous" financial statement - which included a cut in corporation tax.

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