After six weeks in power, the British prime minister had to go back on a sweeping plan to cut unfunded liabilities, which rattled financial markets.
British Prime Minister Liz Truss vowed in an interview with the BBC on Monday evening that she regrets her “mistakes” and wants to stay in office “for the national good”. Or just hours after its economic plan was abandoned, announced by its new finance minister.
“I want to take my responsibility and apologize for the mistakes,” said the conservative leader, whose mandate appeared to have deteriorated after six weeks in office.
“I will remain in my post to fulfill my duties in the national interest,” he assured.
“Hard” results will follow
“I was quick to correct these errors,” Liz said, sending Truss to her majority address, where intrigue was mounting behind the scenes and pushing her toward eviction.
Jeremy Hunt, his new finance minister hastily appointed on Friday after a market storm unleashed by his predecessor Kwasi Kwarteng’s “growth plan”, now takes the helm of government after weeks of market turmoil that threatened the country’s financial stability.
On Monday, he unveiled the main lines of the medium-term budget plan, which is due to be presented in full on October 31. Jeremy Hunt warned of “extremely harsh” results in future state spending cuts and tax increases, a wholesale rejection of Liz Truss’s initial plan, but promised the government would “prioritise ‘help for the most vulnerable'”.
At the end of September Kwasi Kwarteng’s plans for massive tax cuts and a massive boost to energy tariffs were not fully accounted for and would have to be financed by borrowing, raising fears of slippage in the public accounts.
The pound fell to an all-time low and long-term government borrowing rates rose, undermining pension funds and raising borrowing rates for households and businesses in an already struggling UK economy.
Towards the shortest period in British history?
The Bank of England had to intervene to prevent the situation from deteriorating into a financial crisis and the Monetary Fund called for a course correction.
Liz Truss sent the minister responsible for relations with parliament, Benny Mordant, to respond to opposition parties in parliament, fueling questions about her disintegrating powers.
Liz Truss later appeared at Westminster with the chancellor of the exchequer, but remained blankly silent as she faced protests that she had ‘disgraced’ a prime minister and could not continue in office.
With only 40 days in power, he risks becoming the shortest-serving Prime Minister across the Channel.
“This is a crisis created by the Tories in Downing Street, but ordinary people are paying the price,” said Rachel Reeves, Labour’s head of finance.
He asked why the government did not tax energy producers to fund budget support, and said he feared a return to “austerity season 2” after the severe cuts of the 2010s.
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