Liz Truss

In a move to calm financial markets and her own Conservative Party, Prime Minister Liz Truss canceled planned tax cuts for corporations and replaced Kwasi ...

That [prompted the Bank of England](https://www.npr.org/2022/09/29/1125859448/the-british-economy-is-in-freefall-with-a-rare-intervention-by-the-bank-of-engla) to step in to prevent a crisis. As confidence and anticipation have grown for further changes, the pound inched up in value on Thursday and bond markets stabilized some. [record low](https://www.npr.org/2022/09/26/1125080014/british-pound-record-low-dollar) against the dollar. "When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices," Kwarteng said in his departure letter. He and Truss held urgent talks in Downing Street shortly after his return to London. Then hours later, she announced a U-turn on their economic package, attempting to calm financial markets and reinforce her shaky leadership position little more than a month after taking office.

The sharp policy U-turn by Liz Truss, Britain's prime minister, reveals the perils of taking the wrong path in the fight against scalding inflation.

“There were sclerotic high taxes and an overregulated economy, but not anymore.” Today, taxes in Britain are lower, and the economy is less regulated than the average member of the Organization for Economic Cooperation and Development, a club of 38 major economies. The richest countries that make up the Group of 7 are essentially part of the same “monetary and fiscal convoy,” said Will Hutton, president of the Academy of Social Sciences. “Public investment in research and skills are more important.” The result was a reduction in government revenue and a ballooning of Britain’s debt. By championing a Thatcher-era blend of steep tax cuts and deregulation, he said, the Truss government strayed too far from the rest of the flotilla and the economic mainstream. “Central banks printed every single dollar, euro and pound that governments spent” to support households and businesses because of the Covid crisis, Mr. “The situation in 1979 was very different,” Ms. Truss, instead of coming up with a way to pay for energy assistance, pushed to eliminate a corporate tax increase and cut income taxes for the wealthiest segment of the population. This year, the Fed has been swiftly raising interest rates in a bid to slow growth. Tension between the fiscal spending policies proposed by a government and the monetary policies controlled by central banks is not unusual. “Measures to help households hit hard by energy increases, by themselves, would not have created that much of a stir,” he said. Truss fired her top finance official, Kwasi Kwarteng, for creating precisely the package of unfunded tax cuts, billion-dollar spending programs and deregulation that she had asked for.

Even by British traditions of political failure, this prime minister's brief tenure has been a spectacular disaster.

This has not happened before and would surely act like a knife to the body politic, leaving a permanent scar on the country’s reputation. I’d lived through the turmoil of Afghanistan and Iraq, the global financial crisis and Brexit. Then she brought [forward the date](https://www.bbc.com/news/uk-politics-63206989) when the government would reveal how it was going to pay for all its tax cuts, which created the obvious concern that a fresh round of austerity was on its way. assistance, and then again in the late ’70s when it was bailed out by the IMF. What’s happening now is entirely new: the very real prospect that the markets will force a change of prime minister before an election. When the Queen died, it fell to Truss to speak for the nation. It was in this position after the war when it needed U.S. This, in turn, led ordinary banks to start hiking their mortgage rates in expectation of what was coming, just as Sunak had warned, which then sent the property-owning middle classes into a tailspin as they rushed to lock in new rates before the numbers spiked even further. For the first time in my adult life, there is a genuine sense of decay in Britain—a realization that something has been lost that will be difficult to recover, something more profound than pounds and pence, political personalities, or even prime ministers. In a single act of folly, Truss had destroyed her premiership and her party’s reputation while resurrecting Labour’s, which had only just been recovering from its own bout of insanity under Jeremy Corbyn. [abandoning](https://www.bbc.com/news/live/uk-politics-63221738) the central tax-cutting purpose of her premiership and sacking her closest political ally, who had implemented this vision. has been gripped by a crisis of crushing stupidity, one that has gone beyond all the turmoil of Brexit, Boris, even the great bank bailouts of 2007, and touched that most precious of things: core national credibility.

British Prime Minister Liz Truss has fired her finance minister and taken a U-turn on part of her economic policy. Now the question is, how long will Truss ...

And I was just out in the south of England this week watching British soldiers training a couple of hundred Ukrainian soldiers to go back and fight the Russians back in the south and in the east of Ukraine. Brexit split the country and also split the Conservative Party. LANGFITT: Well, you know, this was the thing that helped get her elected by the rank and file in the party. And you combine that with the scandals of Boris Johnson. There is a political consensus here on the war in Ukraine. He's a professor of government at the London School of Economics, and he doesn't think Truss is long for No. And that is an incredibly powerful driver of their behavior. So this was a crisis, Sacha, that actually was very palpable for the ordinary person. For more on the latest turmoil in British politics, we turn to NPR's London correspondent Frank Langfitt. She ran on a platform of massive tax cuts that she, in fact, didn't really have a way to fund. PFEIFFER: Frank, this was a very quick U-turn. This time it's Liz Truss, who's been in the job fewer than six weeks.

Great Britain's new prime minister finds herself in crisis. Where did it all go wrong for Truss?

As we enter winter, Truss may well prove to be the latest casualty of that conundrum. By scrapping her flagship tax cuts, she has telegraphed extreme weakness to her opponents within the Conservative Party. In such circumstances, governing as a low-tax Tory is as difficult as navigating the laser beams you see in action movies. The big question, though, is whether she even makes it that far. In Britain, it's conventional wisdom to point to the infamous "mini budget" of September 23, in which Truss marked her arrival with a sudden package of unfunded tax cuts. But the picture is exaggerated by nervousness among flighty investors, few of whom would claim to know how this will play out in the long term. In a calamitous press conference from Downing Street (never a good sign in British politics), Truss insisted her economic mission had not changed—even if some of her colleagues are speculating she will be gone within weeks. Truss and her rival Rishi Sunak entered the contest agreeing that Britain's tax burden had become too high ( She thought it better to cut taxes now and let the market work its magic. In Truss' defense, Britain isn't the only country dealing with this conundrum. Friday brought another twist, when Truss made the dramatic decision to fire her most senior cabinet minister, Chancellor of the Exchequer Kwasi Kwarteng, as part of an attempt to reset her premiership. [with worse approval ratings than her predecessor](https://www.bloomberg.com/news/articles/2022-10-08/truss-s-approval-rating-plumbs-new-lows-after-party-conference).

A major reshuffle and the scrapping of a key tax-cutting pledge by U.K. Prime Minister Liz Truss on Friday wasn't enough to placate markets.

Corporation tax was set to increase from 19% to 25% under Truss' predecessor, Boris Johnson, but that was scrapped by Truss during the mini-budget on Sept. We do not expect financial concerns to abate as a result of today's action," Citi Bank said. The tax will now increase as originally planned. "We would not be surprised if Conservative MPs pressure Truss to resign in coming days. [A major reshuffle and the scrapping of a key tax-cutting pledge by U.K. The announcements Friday may have come too late, suggested Ben Laidler from investment company eToro. U.K. "The implication is PM Truss now faces a squeeze between her Parliamentary party on the one hand and markets on the other. - U.K. - But they gave back gains after the conference, with the 30-year yield returning to around 4.773% by around 5 p.m. - The tax will now increase as originally planned. - Corporation tax was set to increase from 19% to 25% under Truss' predecessor, Boris Johnson, but that was scrapped by Truss on Friday.

Her new chancellor is looking to reassure investors and reset public finances but some painful choices lie ahead.

One was: "We will do whatever is necessary to ensure debt is falling as a share of the economy in the medium term". With her authority in tatters, she is a prisoner of her cabinet, if they combine to stand up to her. She is a prisoner of her parliamentary party, in which MPs are reported to be deeply dismayed and unimpressed. They also want to see an economy that's geared for growth, and Liz Truss is not the only person who thinks that the UK needs to boost its growth rate. Thursday's expectations of a U-turn rallied bond prices and the pound. Those others are more likely to identify low productivity as the vital and malfunctioning cog in the British economic machine. Corporate investors are attracted to countries with a strong and reasonably predictable rule of law. Bond investors primary concern is with levels of borrowing, but do they care much about the balance of tax and spending? But their job is to safeguard money and earn from it, so they also make a judgement about how much that borrowing profile is likely to change with a new government. For those who invest in company shares rather than bonds, there is a recognition that firms do well in a country with strong public services. You might well find that financiers are more likely to be both conservative about public finance and Conservative with their votes. The experience of Greece, during the Eurozone crisis, showed how it can happen - a democratic mandate blown off course because the markets don't think the government can sustain its borrowing.

Five contenders who could succeed Truss as the Conservative party's fifth leader since the Brexit vote in 2016.

Sunak would have the post-Truss advantage of being viewed as a safe pair of fiscal hands. Gove would, however, be something of an outsider for the job. As it turned out, the financial markets – and now many voters – seem to think he was correct. Largely untarnished by the Astonishing as it may sound to someone who has not paid attention to politics since about 2016, after little more than a month in office, a consensus is building that Liz Truss could be finished as prime minister. [been soundly rejected](https://www.theguardian.com/politics/2022/sep/05/liz-truss-wins-tory-leadership-race-to-become-britains-next-pm) by Conservative members, but he was the top choice of the party’s MPs, and he has spent the last month, in effect, being able to silently show he was right.

British Prime Minister Liz Truss has fired her finance minister and taken a U-turn on part of her economic policy. Now the question is, how long will Truss ...

And I was just out in the south of England this week watching British soldiers training a couple of hundred Ukrainian soldiers to go back and fight the Russians back in the south and in the east of Ukraine. Brexit split the country and also split the Conservative Party. LANGFITT: Well, you know, this was the thing that helped get her elected by the rank and file in the party. And you combine that with the scandals of Boris Johnson. There is a political consensus here on the war in Ukraine. He's a professor of government at the London School of Economics, and he doesn't think Truss is long for No. And that is an incredibly powerful driver of their behavior. So this was a crisis, Sacha, that actually was very palpable for the ordinary person. For more on the latest turmoil in British politics, we turn to NPR's London correspondent Frank Langfitt. She ran on a platform of massive tax cuts that she, in fact, didn't really have a way to fund. PFEIFFER: Frank, this was a very quick U-turn. This time it's Liz Truss, who's been in the job fewer than six weeks.

Britain's Liz Truss has sacrificed her finance minister and closest political ally just weeks into her premiership in order to save her own skin, ...

Under party rules, Truss is protected from a leadership challenge for the first year of her premiership. All of which means that for now, Truss and her party are stuck. Some Conservative MPs think that Hunt, who served as health secretary, foreign secretary and culture, media and sport secretary under previous governments, will bring unity to a party that is still recovering from the summer’s bruising leadership contest. Truss swiftly replaced Kwarteng with Jeremy Hunt, a former cabinet minister of multiple briefs who has stood for the leadership twice. Kwarteng and Truss were in lockstep in their vision for Britain; removing him from office is a tacit acceptance that her economic plan has failed. Kwarteng being gone, however, does not mean that Truss is out of the woods.

A British newspaper on Friday pitted Liz Truss in a race against a lettuce, asking readers if they thought the under-fire prime minister would lose her job ...

The stunt echoed a comment at the other end of Britain's journalistic spectrum. Register now for FREE unlimited access to Reuters.com

British prime minister Liz Truss, who finds herself in a mess completely of her own making, took desperate action on Friday to mollify her many critics and ...

(To be fair, she did inherit soaring inflation amid a damaging energy crisis.) There is apparently serious talk among Tories about trying to oust Truss in the coming weeks: She reversed the scrapping of a corporate tax hike, a move that had baffled economists and almost everyone else. But the bulk of her supply-side agenda remains intact. Even if Truss’s most sweeping plans aren’t put into place, the political damage has been done. On Friday, Truss fired her chancellor of the Exchequer, Kwasi Kwarteng, for the apparent sin of loudly supporting Truss’s own policies. Kwarteng had become a public face of Truss’s proposed unfunded tax cuts, which inspired fierce criticism across the U.K.

In a move to calm financial markets and her own Conservative Party, Prime Minister Liz Truss canceled planned tax cuts for corporations and replaced Kwasi ...

And plenty of warning was given by many of us about what would happen if we had unfunded tax cuts and whether it would be financially and politically sustainable." That [prompted the Bank of England](https://www.npr.org/2022/09/29/1125859448/the-british-economy-is-in-freefall-with-a-rare-intervention-by-the-bank-of-engla) to step in to prevent a crisis. As confidence and anticipation have grown for further changes, the pound inched up in value on Thursday and bond markets stabilized some. [record low](https://www.npr.org/2022/09/26/1125080014/british-pound-record-low-dollar) against the dollar. "When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices," Kwarteng said in his departure letter. Then hours later, she announced a U-turn on their economic package, attempting to calm financial markets and reinforce her shaky leadership position little more than a month after taking office.

LONDON — What do British Prime Minister Liz Truss's political tenure and a wilting head of lettuce have in common, you might ask?

[echoed](https://twitter.com/LibDems/status/1580897121435144192) a similar sentiment: “Enough is enough. before frantically flying back to the U.K.), with a former foreign minister Jeremy Hunt, who pledged Saturday to restore economic credibility. Hunt lost the Conservative Party leadership race to Johnson in 2019. “We need a change in government.” “Changing the Chancellor doesn’t undo the damage made in Downing Street. [predicting ](https://www.washingtonpost.com/world/2022/09/06/liz-truss-troubled-britain-leader/?itid=lk_inline_manual_36)a possible winter of discontent on the horizon. [plunging the pound](https://www.washingtonpost.com/world/2022/09/27/british-pound-drop-dollar-us-impact/?itid=lk_inline_manual_31) and forcing the [Bank of England to take unprecedented interventions](https://www.washingtonpost.com/world/2022/09/28/boe-uk-pound-intervention/?itid=lk_inline_manual_31) to quell the financial revolt. It started with Boris Johnson failing our country, and now Liz Truss has broken our economy. [decried ](https://twitter.com/PippaCrerar/status/1581016433420832769)“A day of chaos,” while the Mirror tabloid [simply ](https://www.bbc.co.uk/news/blogs-the-papers-63265862)said “Time’s up.” [dubbed ](https://www.economist.com/leaders/2022/10/11/liz-truss-has-made-britain-a-riskier-bet-for-bond-investors)Truss “The Iceberg Lady,” bluntly predicting her career has “the shelf-life of a lettuce.” [accused ](https://www.dailystar.co.uk/news/latest-news/liz-truss-lettuce-last-longer-28235047)Truss of being a “lame duck PM” following a “shambolic day,” on Friday as she [fired her finance minister](https://www.washingtonpost.com/world/2022/10/14/uk-truss-kwarteng-budget-tory/?itid=lk_inline_manual_13), Kwasi Kwarteng, after just 38 days in office and u-turned on tax policies, in a bid to steady the wobbling economy. [quipped](https://twitter.com/lockdownurlife/status/1580904686772637696): “In the US we measure such things in Scaramuccis,” referring to Anthony Scaramucci — the [short-serving](https://www.washingtonpost.com/news/post-politics/wp/2017/07/31/anthony-scaramucci-removed-as-white-house-communications-director/?itid=lk_inline_manual_20) White House communications director, who lasted less than a week in the Trump administration.