LONDON: British Prime Minister Liz Truss insisted on his dedication to a “sound” economy ahead of Sunday crisis talks with his all-powerful new finance minister and a tense week of plotting by Tory critics.
With even US President Joe Biden joining in the attacks on his economic agenda, framework admitted it had been a ‘key’ to firing her friend Kwasi Kwarteng as Chancellor of the Exchequer.
But writing in the Sun on Sunday newspaper, she said: ‘We cannot lead the way to a low-tax, high-growth economy without maintaining market confidence in our commitment to sound money.
That trust was undermined on September 23 when Kwarteng and Truss unveiled a right-wing package, inspired by 1980s US President Ronald Reagan, of £45 billion ($50 billion) in exclusively funded tax cuts. by higher debt.
Markets crashed in response, driving up borrowing costs for millions of Britons, and Tory poll scores also fell, leading to open warfare within the ruling party just weeks after Truss succeeded Boris Johnson.
She fired Kwarteng in spectacular fashion on Friday, despite co-writing the package. His replacement, Jeremy Hunt, is dismantling tax cuts, while pushing for his Cabinet colleagues to impose tough spending restrictions, even as Britons face a cost of living crisis.
The new Chancellor met Truss at the Prime Minister’s retreat on Sunday to hammer out a new budget plan which he is due to present on October 31.
“It’s going to be very, very difficult, and I think we have to be honest with people about it,” Hunt said in a BBC television interview broadcast on Sunday.
He defended Truss after her raids and after a disastrous press conference she held on Friday shortly after sacking Kwarteng.
“She’s been prepared to do the hardest thing in politics, and that is to change course,” Hunt said, adding, “The prime minister is in charge.”
Newspapers and several conservatives questioned that verdict, arguing that Truss’ central political platform is now in shambles.
The Treasury declined to confirm reports that Hunt planned to delay a planned reduction in the base income tax rate, scrapping another flagship measure announced by the new government last month.
Up to 100 letters expressing defiance of Truss have been submitted by Tory MPs, the Sunday Times and Sunday Express said.
Opponents reportedly coalesced around Truss’ defeated rival, Rishi Sunak, and another former foe, Penny Mordauntfor a possible “unity ticket” to rebuild the stricken Tories.
Defense Secretary Ben Wallace could be another compromise candidate for the lead, the Sunday Mirror reported.
“I fear that over the past few weeks the government has looked like libertarian jihadists and treated the whole country like some sort of laboratory mouse in which to conduct ultra, ultra free market experiments,” the MP said. conservative Robert Halfon, who supported Sunak. told Sky News.
“Of course colleagues are unhappy with what is happening, with the opinion polls hemorrhaging,” he said. “It is inevitable that colleagues will discuss…to see what can be done about it.”
But Johnson loyalists – still seething over Sunak’s perceived disloyalty to the scandal-ridden former leader – warned of a coronation that would weed out rank-and-file Tories and said the party would face pressure irresistible to organize early general elections.
The coming week could be pivotal for Truss, starting with the initial reactions in the bond and money markets when trading resumes on Monday, and as his restless MPs gather in Westminster.
Hunt at least got significant backing from Bank of England Governor Andrew Bailey, who had to stage costly interventions to calm bond markets through Friday.
Bailey welcomed a “very clear and immediate meeting” with the new chancellor as the central bank prepares to hold its next rate-setting meeting on Nov. 3.
But Biden, in a highly unusual intervention in an ally’s financial affairs, denounced Truss’ attempts to cut taxes for the “super rich.”
“I wasn’t the only one who thought it was a mistake,” the Democratic president said.
With even US President Joe Biden joining in the attacks on his economic agenda, framework admitted it had been a ‘key’ to firing her friend Kwasi Kwarteng as Chancellor of the Exchequer.
But writing in the Sun on Sunday newspaper, she said: ‘We cannot lead the way to a low-tax, high-growth economy without maintaining market confidence in our commitment to sound money.
That trust was undermined on September 23 when Kwarteng and Truss unveiled a right-wing package, inspired by 1980s US President Ronald Reagan, of £45 billion ($50 billion) in exclusively funded tax cuts. by higher debt.
Markets crashed in response, driving up borrowing costs for millions of Britons, and Tory poll scores also fell, leading to open warfare within the ruling party just weeks after Truss succeeded Boris Johnson.
She fired Kwarteng in spectacular fashion on Friday, despite co-writing the package. His replacement, Jeremy Hunt, is dismantling tax cuts, while pushing for his Cabinet colleagues to impose tough spending restrictions, even as Britons face a cost of living crisis.
The new Chancellor met Truss at the Prime Minister’s retreat on Sunday to hammer out a new budget plan which he is due to present on October 31.
“It’s going to be very, very difficult, and I think we have to be honest with people about it,” Hunt said in a BBC television interview broadcast on Sunday.
He defended Truss after her raids and after a disastrous press conference she held on Friday shortly after sacking Kwarteng.
“She’s been prepared to do the hardest thing in politics, and that is to change course,” Hunt said, adding, “The prime minister is in charge.”
Newspapers and several conservatives questioned that verdict, arguing that Truss’ central political platform is now in shambles.
The Treasury declined to confirm reports that Hunt planned to delay a planned reduction in the base income tax rate, scrapping another flagship measure announced by the new government last month.
Up to 100 letters expressing defiance of Truss have been submitted by Tory MPs, the Sunday Times and Sunday Express said.
Opponents reportedly coalesced around Truss’ defeated rival, Rishi Sunak, and another former foe, Penny Mordauntfor a possible “unity ticket” to rebuild the stricken Tories.
Defense Secretary Ben Wallace could be another compromise candidate for the lead, the Sunday Mirror reported.
“I fear that over the past few weeks the government has looked like libertarian jihadists and treated the whole country like some sort of laboratory mouse in which to conduct ultra, ultra free market experiments,” the MP said. conservative Robert Halfon, who supported Sunak. told Sky News.
“Of course colleagues are unhappy with what is happening, with the opinion polls hemorrhaging,” he said. “It is inevitable that colleagues will discuss…to see what can be done about it.”
But Johnson loyalists – still seething over Sunak’s perceived disloyalty to the scandal-ridden former leader – warned of a coronation that would weed out rank-and-file Tories and said the party would face pressure irresistible to organize early general elections.
The coming week could be pivotal for Truss, starting with the initial reactions in the bond and money markets when trading resumes on Monday, and as his restless MPs gather in Westminster.
Hunt at least got significant backing from Bank of England Governor Andrew Bailey, who had to stage costly interventions to calm bond markets through Friday.
Bailey welcomed a “very clear and immediate meeting” with the new chancellor as the central bank prepares to hold its next rate-setting meeting on Nov. 3.
But Biden, in a highly unusual intervention in an ally’s financial affairs, denounced Truss’ attempts to cut taxes for the “super rich.”
“I wasn’t the only one who thought it was a mistake,” the Democratic president said.
