It looks like a pawn: The British Prime Minister dismisses her finance minister just five weeks after taking office. She had defended his radical tax plans shortly before. But Liz Truss now has her back to the wall herself.
British Prime Minister Liz Truss has fired her finance minister, Kwasi Kwarteng. The ousted Chancellor of the Exchequer confirmed this on Twitter. Truss plans to appear before the press later this afternoon. In doing so, she is expected to make a U-turn from her government’s recently announced tax plans. The media speculate that they will present a successor to Kwarteng.
Just over five weeks after taking office, Truss is under massive pressure in her own party. The financial markets had reacted violently after the announcement of significant tax cuts without a counter-financing plan in September. The pound plummeted against the US dollar. The Bank of England has had to intervene and buy government bonds on several occasions in order to withstand the fall in their prices and to prevent the collapse of pension funds. Rising interest rates on home loans exacerbated the cost of living crisis for many homeowners.
The government then withdrew the planned abolition of the top tax rate and, after some hesitation, announced that it would bring forward the presentation of the entire budget by a few weeks. But that only calmed the financial markets temporarily. Most recently, central bank chief Andrew Bailey announced an end to bond purchases for today, Friday. According to some experts, he wanted to force the government to give in. Financial markets reacted positively to reports of a government reversal.
It is questionable whether Truss will be able to calm the financial markets and consolidate their position with the dismissal of their Chancellor of the Exchequer and the expected reversal. British media have already speculated that her party could soon overthrow her.
