Pound latest: Liz Truss blames communication problems for market turmoil after ‘clear’ economic plan

Liz Truss said she would ensure pensions rise in line with inflation, but refused to make the same commitment for benefits and government departmental spending.

Not ruling out departmental real-term cuts, the Prime Minister told Sunday With Laura Kuenssberg on BBC One: “I’m not going to write future budgets on your show.

“I believe in outcomes rather than inputs, so I believe in what people see and what people feel.”

Not ruling out rowing back on Boris Johnson’s promise to raise benefit payments in line with inflation, she said: “This is something the Department of Work and Pensions Secretary is looking at at the moment. She will make a determination on that and we will announce that this morning.”

But she was clear pensions would rise in line with inflation, saying: “I’ve committed to the triple lock. Yes.”

Prime minister Liz Truss has refused to commit to increasing welfare benefits in line with inflation, but said she is “absolutely committed” to pressing ahead with the abolition of the top rate of income tax for the rich.

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Liz Truss said scrapping the top rate of income tax for the nation’s highest earners was a decision made by Kwasi Kwarteng rather than being agreed by the wider cabinet.

Asked if she discussed the controversial move with the whole Cabinet, the prime minister told Sunday With Laura Kuenssberg on BBC One: “No, no we didn’t. It was a decision the chancellor made.”

Liz Truss has blamed poor communication for some of the market chaos which followed her chancellor Kwasi Kwarteng’s mini-Budget.

But the prime minister vowed to stick by her £45bn tax cut plan, insisting she had made “the right decision” to expand government borrowing.

“I understand their worries about what has happened this week, but I stand by the package we announced and I stand by the fact that we announced it quickly,” she told BBC’s Sunday with Laura Kuenssberg.

The prime minister said: “But I do accept that we should have laid the ground better. I’ve learned from that and I will make sure that in future we do a better job of laying the ground.”

Liz Truss has avoided the question posed many times by Laura Kuenssberg on BBC about whether she will cut spending on public services.

She diverted the question, saying: “I am going to make sure we get value for money for the tax-payer. I’m going to make sure we get excellent front-line services.

“My approach is to help people get through a very difficult winter.”

The prime minister continued to defend her fiscal actions, as she told BBC: “The alternative was people would be paying up to £6,500 on energy bills.

“We’re not living in a perfect world.

“Of course, we need to bring down borrowing as a proportion of GDP over a long-term plan.

“What would have been wrong is for us not to have acted.

“I’ve been honest that we should have laid the ground down better, but we have been living in a set of extreme circumstances here in the UK.”

Speaking on interest rates and her mini-budget on BBC this morning, the prime minister has said: “We had to act on taxation to make sure the economy didn’t slow down any further, and this is important.

“We’re trying to avoid a serious economic slowdown.

“I do want to say to people, I understand their worries about what has happened this week, I do stand by the package we announced, I stand by the fact that we announced it quickly, but I do accept that we should have laid the ground out better, and I will learn from that.”

On the issue of household bills being supposedly capped at £2,500- a figure which experts have said the prime minister has miscalculated- Liz Truss has said “this is the bill for an average family, but what we are preventing is those extraordinary bills people were expecting.”

Speaking on BBC this morning, she said: “It was important that the government stepped in to deal with this.

“We’re not just dealing with it for six months. We’re dealing with it for two years to make sure people have that reassurance.”

Michael Gove has said there were “mistakes made” in the mini-budget announced by chancellor Kwasi Kwarteng last Friday.

Speaking to Laura Kuenssberg on BBC this morning, Mr Gove said that despite the mistakes, there is “room” for improvement to be made.

Liz Truss has a matter of days to row back on controversial tax and welfare cuts or face a parliamentary rebellion which could see her removed from Downing Street by Christmas, Conservative MPs have warned.

As the prime minister arrived in Birmingham for her first annual conference as leader, senior backbenchers told The Independent that MPs across the party are “livid” at suggestions she plans to renege on a promised benefit uprating to pay for tax cuts for the rich in chancellor Kwasi Kwarteng’s mini-Budget.

One described the combination of austerity for the poor and giveaways for the wealthy as “electoral suicide” and confirmed Tory MPs were talking to Labour on parliamentary means of stopping it.

Andrew Woodcock and Adam Forrest report: