Dame DeAnne Julius, a founder member of the Bank of England’s Monetary Policy Committee, said the latest unemployment numbers showed there was a “hot demand for workers”.

“There’s clearly a reluctance there in the labour market on the supply side of people to come back to work fully,” she told BBC Radio 4’s Today programme, adding that many people were “sitting on the fence” about returning to their pre-pandemic careers.

Asked whether the growth in average weekly earnings pointed to a higher-wage economy of the kind Prime Minister Boris Johnson has hailed, the economist said: “The evidence is still out on that one.”

Rishi Sunak has been criticised for looking to save billions of pounds by “recycling” money from an International Monetary Fund (IMF) windfall as aid spending.

Campaigners believe the chancellor is preparing to use a large portion of the windfall in the overseas aid budget rather than on top of it.

Andrew Mitchell MP, who led the Tory rebellion against the aid cut, said the move would have a “devastating effect on humanitarian causes British people care about and send a terrible message about global Britain”.

Our reporter Liam James has the full story below:

UK job vacancies have reached a record high according to latest figures from the Office for National Statistics.

According to the report, vacancies hit 1.1 million between July and September, the highest level since 2001, with the largest increases in the retail and motor vehicle repair sectors.

Chancellor Rishi Sunak said the increase was “encouraging.”

“The number of expected redundancies remained very low in September, there are more employees on payrolls than ever before and the unemployment rate has fallen for eight months in a row,” he added.

Boris Johnson will reportedly back plans to loan millions to help industries hit by the rise in global gas prices.

Despite concerns from the Chancellor Rishi Sunak, No 10 will reportedly back plans submitted by business secretary Kwasi Kwarteng.

The government came under fire from heavy industry leaders as soaring energy costs threatens to shut businesses including factories. The Times reported that companies threatened with closure would be given loans to prevent them from shutting down over the winter, and to stop thousands of jobs being lost.

Mr Kwarteng held talks with industry leaders last week, and ministers and officials are set to continue speaking to businesses throughout this week.

He has pledged to keep the energy price cap in place to help households struggling with rising costs.

Without fresh funds factories could be forced to halt production of critical inputs such as high-tech ceramic coatings, steel components and bespoke glassware, according to government and industry sources. Such products are used in a range of high security environments, including nuclear reactors, laboratories, ships and submarines.

Our Economics Editor Anna Isaac and political correspondent Ashley Cowburn have the full story below:

Good morning, and welcome to The Independent’s rolling UK politics coverage. Stay tuned as we bring you the latest updates as the government backs the business secretary’s energy bailout plan and the defence sector is the latest to be hit threatened by the crisis.