Is British Prime Minister Liz Truss about to lose her job again?
Eight minutes. Liz Truss, 47, couldn’t hold back as she announced her turnaround on tax policy and her move as Chancellor of the Exchequer in front of reporters in Westminster. The scene that unfolded on London’s Downing Street on Friday seemed awkward and illogical.
Not long ago, the prime minister sacked his finance minister Kwasi Kwarteng, 47, after the duo’s tax plans literally collapsed. Former Secretary of State and Health Jeremy Hunt now takes over his post.
Can Truss survive the crisis?
But whether the head of government can survive this crisis is questionable. The Truss on Friday restored the previously announced corporate tax cut as the centerpiece of its pro-growth agenda. It will bring £18 billion (about €20.7 billion) into the Treasury’s coffers. This is already the second course amendment since the government stopped the repeal of the higher tax rate.
But that still leaves a huge hole in his budget of around £25bn.
But Truss was anything but insightful. She insisted she was on the right track. Parts of their so-called mini-budget were “more” and “faster” than markets expected, Truss said. He added: “We must act now to trust the markets with our financial discipline.”
Financial markets are in turmoil
Jeremy Hunt (55), who has many years of government experience, will undoubtedly contribute to this. However, critics have pointed out that he himself promised even bigger tax breaks when he succeeded Johnson in the summer.
Problem: Investors have lost faith in the British government. As a result, the pound fell against the dollar and government bond yields rose. That means the government has to pay more to borrow from the capital market. This accelerated the rise in interest rates on real estate loans. The central bank was forced to buy 19 billion pounds of bonds to stem the trend.
There was no sign on Friday evening that Truss could have regained the confidence of financial markets with a reluctant appearance in Downing Street. Instead, bonds rose again. A sign that the turnaround isn’t good enough for investors.
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The Tory Party wants them out
If that’s the case, things will soon get tight for Truss. Saturday’s Daily Mail headlined: “How much more can she (and we) take?” There are already rumblings in the Tory party. Sky News reporter Beth Rigby quoted an inside source as saying the chairman of the so-called 1922 Committee had received a significant number of letters.
The parliamentary committee is a mood barometer of whether a prime minister still has the confidence of her fellow MPs, perhaps forcing Trudeau to resign.
If Trudeau is ousted, Britain will soon have its fifth prime minister in six years. As the Truss lacks its own mandate, early elections are expected to be inevitable. This is actually a red rag for the Conservatives, as the opposition Labor Party leads in some polls by more than 30 points. (SDA/euc)
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