17:12 2 October 2022
The Prime Minister got the UK into trouble
The announcement of tax cuts has hit the UK's financial fundamentals and led to a fall in the value of the pound and the need for intervention from the central bank there. Prime Minister Liz Truss is not backing down from the reforms, but admits she "should have prepared the ground better".
As a result, the pound's exchange rate against the dollar has fallen to its lowest level since 1971, and the Bank of England has begun to intervene by buying bonds and hinting at large interest rate rises, which in turn is pushing up lending rates and reducing their availability.
In a wide-ranging interview with the BBC, Truss defended the announced decisions, saying that the country would otherwise be in "serious trouble".
"I stand by what we announced and the fact that we announced it quickly. I want to assure people that we have a very clear plan," she stated.
She added that she understood the concerns over what had happened over the past week, but also stressed that interest rates were going up around the world.
