London UK Treasury Secretary Kwasi Kwarteng has been sacked by Prime Minister Liz Truss. The British media report unanimously.
He has been blamed for the recent turmoil in financial markets, fueled by debt-financed tax cuts and heavy spending to keep energy prices down. A successor is not yet known. A government spokesman declined to comment.
Kwarteng ended his participation in the fall meeting of the International Monetary Fund (IMF) in Washington early in order to return to London for crisis meetings. The aim should be to calm the financial markets.
According to the newspaper “Guardian”, there should also be a change of course in terms of content – on budgetary issues and the previous plan to leave corporate taxes at 19 percent.
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According to a report in the Times newspaper, opposition to British Prime Minister Liz Truss is increasing in the Conservative Party. Leading Tories would discuss replacing the head of government after just over a month in office, the newspaper wrote on Friday night. There are considerations to set up a joint candidate.
A pact between ex-Finance Minister Rishi Sunak and Tory leader Penny Mordaunt is also possible, the Times reported, citing senior party members. Both had failed in the internal competition for party leadership because of Truss. A “council of elders” made up of dozens of former cabinet members is ready to ask Truss to give up.
A “council of elders” made up of dozens of former cabinet members is ready to ask Truss to give up.
(Photo: Reuters)
There had recently been turbulence again and again due to debt-financed tax cut plans and high special expenditure to dampen energy prices. The British central bank felt compelled to intervene in the market by buying bonds. After fierce protests, including from leading Tories, Truss and Kwarteng reversed the abolition of the top tax rate.
Another U-turn in the budget
Now another turnaround is likely: As the newspaper “Guardian” wrote, Kwarteng did not want to withdraw the significant increase in corporate tax planned for April. The Prime Minister had repeatedly stressed that the increase from 19 to 25 percent decided by her predecessor Boris Johnson would be canceled.
Kwarteng wanted to present his medium-term budget plans on October 31st. Until then, you have to be patient, said Greg Hands, who is responsible for trade policy in the British government. The government is determined to ensure more growth. “There are absolutely no plans to change anything,” he told radio station LBC.
The markets reacted positively, but Truss seems to be getting nowhere with voters. In a survey by the opinion research institute Yougov for the “Times”, 50 percent were in favor of putting Truss out the door, only 9 percent supported the head of government.
More: Bye-bye: the fall of the British pound