Liz Truss May Face New Market Turmoil After Sacking Kwarteng

On Friday, UK Prime Minister Liz Truss replaced her close ally Chancellor Kwasi Kwarteng with former Foreign Secretary Jeremy Hunt, in a last-ditch effort to calm the markets, before reversing plans to scrap a rise in corporate tax, a key part of No 10’s mini-budget.

UK Prime Minister Liz Truss may face a new market turmoil early next week after she fired Chancellor Kwasi Kwarteng on Friday amid political and economic backlash that followed the government’s emergency tax-cutting mini­-budget, Bloomberg reported.

The news outlet suggested that by announcing a U-turn on her plan to freeze corporation tax and leaving her other tax cuts in place, Truss actually “laid the ground” for more market tumult on Monday.

According to the report, Truss’ pledge that new Chancellor Jeremy Hunt will not make more U-turns “will do little to sooth market jitters”.

The outlet also cited an unnamed Tory MP as claiming that Truss “has days left in the job”. Another source told Bloomberg that Truss will purportedly resign before Christmas, and that the UK having a new prime minister is “a question of when rather than if”.

The Independent, in turn, reported that Truss could be ousted as prime minister within “days or weeks”, with a group of senior Tory officials expected to tell the PM early next week that “the game is up” and that she should consider her position.

This comes after Truss told a press conference on Friday that “it is clear that parts of our mini-budget went further and faster than markets were expecting, so the way we are delivering our mission right now has to change?

Announcing her U-turn on the corporation tax, Truss then dismissed calls for her resignation and stressed that she was "absolutely determined to see through what I have promised". Some Tories blasted her speech as “shockingly bad”, calling it "an agony".

One unnamed source was quoted by the Independent as saying that the PM “looked like she had been dragged there like a reluctant child being forced to explain itself. There was no contrition”.

No 10’s second U-turn followed the first one in early October, when Truss and Kwarteng abandoned their move to abolish the 45% additional rate of income tax, payable on earnings over £150,000, following the publication of the government’s mini-budget late last month, which led to UK market tumult.

A fresh poll published by the London-based consulting company Savanta ComRes on Friday has meanwhile indicated that more than seven in ten people currently believe that Truss cannot regain the trust of the British people.