The decision, first reported in the Financial Times, comes after a bruising few days which has brought about a change of heart in Downing Street.

Read more: How No 10 plunged itself into crisis

I understand Downing Street has backed down amid fears about the backlash from disgruntled MPs and voters.

The Treasury and Number 10 declined to comment.

The decision is a massive about-turn. In a news conference last week, the chancellor appeared to pave the way for manifesto-breaking tax rises in the budget on 26 November.

She spoke of difficult choices and insisted she could neither increase borrowing nor cut spending in order to stabilise the economy, telling the public "everyone has to play their part".

The decision to backtrack was communicated to the Office for Budget Responsibility on Wednesday in a submission of "major measures", according to the Financial Times.

The chancellor will now have to fill an estimated £30bn black hole with a series of narrower tax-raising measures and is also expected to freeze income tax thresholds for another two years beyond 2028, which should raise about £8bn.

Tory shadow business secretary Andrew Griffith said: "We've had the longest ever run-up to a budget, damaging the economy with uncertainty, and yet - with just days to go - it is clear there is chaos in No 10 and No 11."

How did we get here?

For weeks, the government has been working up options to break the manifesto pledge not to raise income tax, national insurance or VAT on working people.

I was told only this week the option being worked up was to do a combination of tax rises and action on the two-child benefit cap in order for the prime minister to be able to argue that in breaking his manifesto pledges, he is trying his hardest to protect the poorest in society and those "working people" he has spoken of so endlessly.

But days ago, officials and ministers were working on a proposal to lift the basic rate of income tax - perhaps by 2p - and then simultaneously cut national insurance contributions for those on the basic rate of income tax (those who earn up to £50,000 a year).

That way the chancellor can raise several billion in tax from those with the "broadest shoulders" - higher-rate taxpayers and pensioners or landlords, while also trying to protect "working people" earning salaries under £50,000 a year.

The chancellor was also going to take action on the two-child benefit cap in response to growing demand from the party to take action on child poverty. It is unclear whether those plans will now be shelved given the U-turn on income tax.

A rough week for the PM

The change of plan comes after the prime minister found himself engulfed in a leadership crisis after his allies warned rivals that he would fight any attempted post-budget coup.

It triggered a briefing war between Wes Streeting and anonymous Starmer allies attacking the health secretary as the chief traitor.

Read more: Is Starmer 'in office but not in power'?

The prime minister has since apologised to Mr Streeting, who I am told does not want to press for sackings in No 10 in the wake of the briefings against him.

But the saga has further damaged Sir Keir and increased concerns among MPs about his suitability to lead Labour into the next general election.

Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM's political capital, makes manifesto-breaking tax rises simply too risky right now.

But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week's news conference.

The corporation said it was an "error of judgement" and the programme will "not be broadcast again in this form on any BBC platforms".

But it added that it "strongly" disagrees that there is "a basis for a defamation claim".

The White House has not offered comment, but instead told Sky News to direct questions to "the president's outside counsel on this matter". Sky News is awaiting a response from the President's counsel.

BBC Trump row latest: BBC apology may be better for Trump than a lawsuit

Donald Trump's legal team earlier revealed that the US president has not yet filed a lawsuit against the BBC over the
broadcaster's editing of a speech he made in 2021 on the day his supporters overran the Capitol building.

Legal experts have said that Mr Trump would face challenges taking the case to court in the UK or the US.

Deadlines to bring the case in English courts, where defamation damages rarely exceed £100,000 ($132,000) expired more than a year ago.

Because the documentary was not shown in the US, it would be hard to show that Americans thought less of him because of a program they could not watch.

Despite this, Mr Trump's legal team sent a letter over the weekend threatening to sue the BBC for $1bn and issuing three demands:

• Issue a "full and fair retraction" of the Panorama programme
• Apologise immediately
• "Appropriately compensate" the US president

On Sunday evening, two of the BBC's top figures, including the director-general, resigned amid the row over the edit and concerns about impartiality.

In a statement, the corporation said: "Lawyers for the BBC have written to President Trump's legal team in response to a letter received on Sunday.

"BBC Chair Samir Shah has separately sent a personal letter to the White House making clear to President Trump that he and the Corporation are sorry for the edit of the President's speech on 6 January 2021, which featured in the programme.

"The BBC has no plans to rebroadcast the documentary 'Trump: A Second Chance?' on any BBC platforms.

"While the BBC sincerely regrets the manner in which the video clip was edited, we strongly disagree there is a basis for a defamation claim."

On Thursday, the BBC said it was looking into fresh allegations, published in The Telegraph newspaper.

The Telegraph claims another BBC programme, Newsnight, also selectively edited footage of the same speech, in a report broadcast in June 2022, two years before Panorama's edit.

A BBC spokesperson said: "The BBC holds itself to the highest editorial standards. This matter has been brought to our attention and we are now looking into it."

Liberal Democrat leader, Sir Ed Davey, on Thursday said the party had written to Sir Keir Starmer, calling on him to demand that Mr Trump "drop his ludicrous one billion dollar lawsuit against the BBC".

This month, another UK regional airline, Eastern Airways, officially went into administration as our appetite for flying internally continues its steady descent.

A total of 213,025 UK flights were scheduled in 2025, compared to a peak in 2006 of 454,375 flights, research by aviation analytics firm Cirium, has found.

In other words, a fall of more than 240,000 flights, or an average daily reduction of 661 flights across the UK.

Perhaps surprisingly, cost isn't a major factor in customers choosing to ditch flying for the car, coach or train, as fares have stayed roughly flat.

A pre-booked London to Edinburgh flight 20 years ago cost on average between £50 and £100 (once adjusted for inflation) compared with fares of around £40 - £70 today.

So what's driving the trend?

A combination of better and more frequent train services, higher Air Passenger Duty tax, concern about the environmental impact of flying, and changing work patterns - especially since the pandemic - have all played a part.

Jeremy Bowen, Cirium CEO, said the results showed a "staggering change in the way we travel throughout the UK".

"Airlines have responded by reducing their internal services and prioritising more popular destinations including Spain, France, and Italy," he added.

Twenty years ago, Britain's skies were busy with short domestic hops - British Airways (BA) and British Midland (bmi) shuttled passengers between London and the regions, and Flybe's purple planes connected cities like Exeter, Leeds, Norwich, and Southampton.

Counting the cost

The impact of changing demand has been brutal.

Flybe, once Europe's largest regional airline, has collapsed twice; bmi and its low-cost arm, bmibaby, is long gone; and several UK hubs have closed their commercial operations over the past 20 years, including Doncaster Sheffield in 2022, Blackpool in 2014 and Plymouth in 2011.

Also, airlines have shifted their priorities to making greater profits from short-haul services beyond the UK.

Aviation consultant Gavin Eccles said key low-cost carriers, such as easyJet and Ryanair, "have been ordering larger aircraft which means they can fly longer sectors".

"They need to serve routes that are predominantly with strong ancillary options [baggage, seating] and domestic is more about commuting, so fewer chances to make extra revenues," he explained.

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Indeed, many surviving airports - like Southampton, Norwich, and Exeter - now rely mainly on seasonal leisure flights.

Domestic flights tend to be limited to feeder flights to long-distance hubs like Heathrow, Amsterdam, and Dublin, plus so-called lifeline-style services to remote regions, mostly in Scotland and Northern Ireland.

Rail firms are benefitting, with passenger journeys rising from about 1.08 billion in 2005/06 to 1.73 billion in 2024/25 - an increase of around 60%, according to the Office of Rail and Road Data.

Crowds cheered at Florida's Cape Canaveral Space Force Station as they watched liftoff, which had been stalled for four days by bad weather, and then on Thursday suffered two further delays.

Blue Origin latest: Successful launch after last-minute delay

On board were two identical Mars orbiters, named Escapade, which are now heading to the Red Planet and due to arrive in 2027.

But the firm's big success was the recovery of the rocket's reusable first-stage booster, a critical development in the space race with SpaceX. Mr Musk posted his congratulations on X.

It is only the second flight for this new type of rocket, from the company owned by Amazon tycoon, Jeff Bezos.

The rocket headed out over the Atlantic, where it split into its two stages.

The inaugural test flight in January delivered a prototype satellite into orbit, but failed to land the booster stage.

Relief after booster recovery

This time, staff cheered wildly as the booster landed upright on its platform 375 miles (600km) offshore in the Atlantic Ocean. The company had never managed the feat before with a rocket so large.

The recovery of the booster is an essential step to recycle and slash costs. The feat has already been achieved with such large rockets by SpaceX.

Blue Origin had achieved this with its much smaller models, but if it wants to consistently run science-scale missions for NASA this is an important step.

The rocket, named after American astronaut John Glenn, weighs roughly the same as 20 trucks. It can put into space a payload of 45 metric tonnes.

At 98m tall and 7m wide, it is larger than most rockets, but not as big as SpaceX's Starship nor the Saturn Vs which sent humans to the moon.

Blue and Gold to visit Red Planet

Meanwhile, NASA's Escapade (Escape and Plasma Acceleration and Dynamics Explorers) mission comprises two identical orbiting spacecraft named Blue and Gold.

The probes intend to study how solar wind interacts with Mars's magnetic environment and how this impacts the planet's atmospheric escape.

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This matters because it will help scientists understand Mars's climate and protect future crews intending to reach the Red Planet.

This was Blue Origin's third attempt to launch, with the first on Sunday scrapped because of clouds and the threat of lightning strikes.

Wednesday's attempt was also postponed as a powerful "cannibal storm" hit Earth.

Sir Keir Starmer's closest confidante has been under fire in recent days following a briefing row that saw allies of the PM say Sir Keir Starmer would fight any attempts to remove him from office.

Health Secretary Wes Streeting was also accused of plotting to replace Sir Keir Starmer after the chancellor's autumn budget.

Mr Streeting has strongly denied the claim, and accused Number 10 of having a "toxic" culture and of attempting to "kneecap" him.

Sir Keir also disavowed the briefings, saying he "never authorised" the attack on his health secretary, and said cabinet ministers should not be briefed against.

This morning, several national newspapers led with calls from Labour MPs and unnamed ministers for Mr McSweeney to resign or be sacked - the chief of staff himself becoming a victim of anonymous briefings.

But Sky News understands that he categorically denies he was "directly or indirectly" behind the briefings and will be remaining in his job.

Mr McSweeney has been in post as chief of staff since October 2024, and is credited as being a key architect of Labour's transformation following the 2019 election defeat and subsequent victory in 2024.

Mr Streeting was not among those who had called for Mr McSweeney to go, saying on Wednesday that "there wouldn't be a Labour government" without him.

But he had a furious reaction to the briefings against him, telling Mornings With Ridge And Frost: "I do think that going out and calling your Labour MPs 'feral' is not very helpful."

He added: "I do think that trying to kneecap one of your own team when they are out, not just making the case for the government, but actually delivering the change that we promised, I think that is also self-defeating and self-destructive behaviour."

Sir Keir said at Prime Minister's Questions on Wednesday: "Let me be clear. I've never authorised attacks on cabinet members. I appointed them to that post because they're the best people to carry out that job."

He also said: "Morgan McSweeney, my team and I are absolutely focused on delivering for the country."

The prime minister and his health secretary spoke "very briefly" later that evening, in which he apologised.

On Thursday, Sir Keir said that he had been "assured that no briefing against ministers was done from No 10", and it appears that no formal investigation into who spoke to journalists on Tuesday is under way.

Tory leader Kemi Badenoch accused Sir Keir of having "lost control of Number 10" and said two weeks from the 26 November budget, "the government has descended into civil war".