Crisis in Britain – Liz Truss reverses course – and sacks her finance minister – News

• British Prime Minister Liz Truss changed her tax policy and sacked Finance Minister Kwasi Kwarteng.
• Former Foreign Secretary Jeremy Hunt is the new UK Chancellor of the Exchequer, according to Downing Street.
• The truss also reverses some of the recently announced tax cuts.

It’s clear some parts of his mini-budget are “much faster” than markets expected, Truss said at a news conference in London on Friday. “We need to act now to convince the markets of our fiscal discipline,” Truss continued. The announcement of the massive tax cut had earlier sent shockwaves through the financial markets. Corporate tax is now – as planned by the previous government – but should increase, Truss said. She initially wanted to grab other tax breaks.

The conservative politician, who took office five weeks ago, had earlier sacked his finance minister Kwasi Kwarteng. Quarteng said on Twitter that he accepted and resigned.

He has been blamed for the recent turmoil in financial markets, stemming from debt-financed tax cuts and higher spending to lower energy prices. Observers see Quarteng’s dismissal as an attempt by Truss to save his own political career.

The background to the government crisis in Great Britain was the sharp reaction of financial markets to the tax cuts announced at the end of September with no plans for counter-financing. The pound fell against the US dollar. The Bank of England has had to step in and buy government bonds on several occasions to prevent their prices from collapsing and pension funds from collapsing. Rising interest rates on real estate loans have compounded the crisis for many homeowners.

Truss appointed former Foreign and Health Secretary Jeremy Hunt as New England Treasury Secretary. The former chairman of the health committee in the British Parliament had applied for the Conservative leadership post in the summer, but lost after a few ballots. During the pandemic, the 55-year-old has been one of the government’s fiercest critics.

The British prime minister has come under increasing pressure from his own ranks over his controversial fiscal policy. Five weeks after taking office, he is already considered politically vulnerable. Polling firm Ipsos determined that only 16 percent of Britons were satisfied with the new prime minister – the worst rating ever for a prime minister.

It is questionable whether the truce will be able to calm the financial markets and stabilize their position through the sacking of the finance minister and the economic turnaround. The British media is already speculating that his party may soon oust him.