The threatened Liz Truss makes new concessions and sacrifices her Treasury Secretary
Another U-turn and the sacking of her Treasury Secretary, Britain’s Prime Minister Liz Truss on Friday made an effort to restore order to a stricken government, an attempt that didn’t seem entirely successful.
Threatened in her post after just a month in power, Liz Truss has resigned herself to announcing a further U-turn in her economic program and parting ways with Chancellor of the Exchequer Kwasi Kwarteng, one of her closest allies.
“It is clear that some parts of our mini-budget have gone too far and too fast compared to market expectations,” Ms Truss admitted during a brief press conference earlier this afternoon, before announcing that she is determined to raise the company tax as planned by the previous Conservative government.
But the Conservative Prime Minister also said she was “absolutely determined” to deliver on her promise of “stronger growth” for the UK economy.
In the hot seat after 38 days in power, Liz Truss announced that Kwasi Kwarteng would be replaced by Jeremy Hunt.
“They asked me to step down as Chancellor of the Exchequer, ‘I agreed,'” Kwasi Kwarteng wrote in a letter to his “colleague and friend” Liz Truss.
He had hastily returned Friday morning from Washington, where he was attending the annual meetings of the International Monetary Fund and the World Bank.
What is happening in the UK “shows how volatile the situation is and that caution must also be at the heart of our budget and monetary mix,” said EU Economic Commissioner Paolo Gentiloni from Washington.
– “Damage” not repaired –
At 55, Jeremy Hunt is close to Rishi Sunak, former Boris Johnson finance secretary and anti-Truss in the Downing Street race. It must help ‘calm the markets’, which have been in turmoil since the announcement on September 23 of a tens of billions of pounds of budgetary measures with unclear funding.
Barely appointed, the fourth Conservative Treasury Secretary since the beginning of the year walked Downing Street. And the Treasury has confirmed that it will present the government’s medium-term budget on October 31, as Kwarteng was supposed to do.
But will this flash press conference, new turn and mini-reshuffle be enough to bring back the economic “stability” Ms Truss wanted and reunite the Conservative ranks?
After his speech, the pound accelerated its descent and the British debt, which had been falling for several days, rose slightly even as the Bank of England ended its emergency measures to calm the markets.
“Changing chancellors will not undo the damage Downing Street has done,” opposition leader Keir Starmer said, accusing Liz Truss of “devastating the economy”.
“I doubt that[Kwarteng’s sacking]will be enough to solve their problems,” Tony Travers, a professor at the London School of Economics, told AFP, also doubting that his press conference “did much reassurance for his colleagues”. .
The Prime Minister, who only answered four questions from journalists before her disappearance, was speaking in a particularly tense context within her party.
– “Zombie” –
According to the British press, some MPs from his camp are already in the process of ousting him amid disastrous polls predicting a crushing defeat for the Conservative majority in the next general election in 2024.
While some, like MP Bernard Jenkin, chairman of the House of Commons Liaison Committee, called for “calm” in the Conservative ranks, others questioned his decision to oust Kwarteng.
“Hard to understand why the Prime Minister sacked a Chancellor (…) who defended the measures used to elect her,” Conservative MP Roger Gale tweeted.
The press wasn’t much kinder to Liz Truss. According to the Financial Times, she’s now a “zombie” prime minister, while the Guardian wonders, “How long can she stay?”
Brits, who have faced skyrocketing mortgage rates and 10% inflation in recent weeks, are also losing patience.
Before Mr Kwarteng was sacked, 59% of Britons and 43% of Tory voters thought Liz Truss should quit, according to YouGov.
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