UK Chancellor and Finance Minister, Kwasi Kwarteng, Sacked

UK Chancellor and Finance Minister, Kwasi Kwarteng, Sacked

With restive Conservatives plotting her own downfall, British Prime Minister Liz Truss fired her finance minister on Friday, leaving Kwasi Kwarteng to shoulder the blame for the unrest caused by her right-wing economic policy.

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Before she was scheduled to conduct her first Downing Street news conference at 2:30 pm, Truss personally fired the chancellor of the exchequer after he hurried back from international talks in Washington (1330 GMT).

Jeremy Hunt, a former foreign secretary and Tory candidate for the party’s top job, was chosen to succeed Kwarteng as finance minister, becoming Britain’s fourth finance minister this year.

“You have asked me to stand aside as your chancellor. I have accepted,” Kwarteng wrote in a letter to Truss, who only succeeded Boris Johnson on September 6.

But he insisted that their economic program was needed because “the status quo was simply not an option”.

In reply, Truss wrote that Kwarteng had “put the national interest first”.

UK Chancellor and Finance Minister, Kwasi Kwarteng, Sacked

“I know that you will continue to support the mission that we share to deliver a low-tax, high-wage, high-growth economy that can transform the prosperity of our country for generations to come,” she said.

Since the Bank of England intervened in bond markets on September 23, the financial turmoil caused by the new government’s intention to cut taxes—financed by billions more in borrowing—has largely calmed.

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However, the central bank was sure that it would cease its bond-buying binge on Friday, and market analysts claimed that the only thing that could forestall new panic was a deeper climbdown by Truss in the wake of Kwarteng’s dismal budget announcement last month.

According to AFP, Tony Travers from the London School of Economics Kwarteng had been selected to serve as the government’s mistakes” — but that the sacking had not taken the pressure off Truss or calmed the Tories.

UK Chancellor and Finance Minister, Kwasi Kwarteng, Sacked

“It’s very hard to see them coming back from this” by the next election, he added.

– ‘Not going anywhere –
Kwarteng was due to have stayed in Washington this weekend to conclude annual meetings of the International Monetary Fund and World Bank after earning a rebuke from IMF chief Kristalina Georgieva on the need for “coherent and consistent” policies.

Speaking in Washington on Thursday, Kwarteng had insisted that his job was safe. “I’m not going anywhere,” he said.

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But UK broadcasters showed live footage of Kwarteng’s British Airways plane landing at Heathrow airport a day early after Truss held hurried meetings with her own financial advisors on Thursday in his absence.

Speculation was rife that Truss would row back on planned changes to corporation tax, has already changed her mind about cutting income tax for the highest earners.

The promised tax cuts were the centerpiece of Truss’s successful pitch to Tory party members that she,, rather than rival Rishi Sunak, was the best candidate to replace Johnson.

UK Chancellor and Finance Minister, Kwasi Kwarteng, Sacked

That program now lies in tatters, and Truss’s judgment is in question more than ever, after Sunak’s warnings were entirely vindicated: higher borrowing to pay for tax cuts served only to terrify the markets and drive up borrowing costs for millions of Britons.

A new YouGov poll for The Times newspaper said 43 percent of Conservative voters want a new prime minister in Downing Street.

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Other polls show a mammoth lead-up opening up for the main opposition Labour party, threatening electoral meltdown for the Tories.

– ‘Romcom-Worthy Dash’ –
Junior minister Greg Hands said “I don’t recognize” multiple reports that senior Tory MPs were plotting to unseat Truss by installing a new leadership team under Sunak and Penny Mordaunt, who also ran to succeed Johnson.

Pressed on whether Truss will still be in 10 Downing Street in a week, Hands told ITV: “Oh definitely.”

The chancellor’s September 23 budget sparked market chaos because of fears it would drive up state debt.

The pound tumbled to a record dollar low near parity with the greenback and bond yields surged, before stabilizing thanks to interventions by the Bank of England (BoE).

UK Chancellor and Finance Minister, Kwasi Kwarteng, Sacked

But with that costly BoE crutch ending on Friday, markets had already priced in a fresh about-turn by the government, leaving Downing Street with no room for maneuver.

Sophie Lund-Yates, the lead equity analyst at Hargreaves Lansdown, said before Kwarteng’s sacking that his “romcom-worthy dash through the airport” showed the government waking up to financial reality.

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But for many pundits, the self-inflicted damage risks proving terminal for Truss and her hard-right platform.

Another new poll by Ipsos showed Truss’s net satisfaction score at minus 51, lower than any of her predecessors this century, while Kwarteng left office with historically low ratings for a chancellor.

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