Britain’s Prime Minister Liz Truss on Sunday vied to reboot her economic programme, but Conservative critics warned the party faces electoral oblivion under her crippled leadership.
With even US President Joe Biden joining in attacks on her libertarian platform, Truss admitted it had been a “wrench” to fire her friend Kwasi Kwarteng as chancellor of the exchequer on Friday.
But writing in the Sun newspaper on Sunday, she said: “We cannot pave the way to a low-tax, high-growth economy without maintaining the confidence of the markets in our commitment to sound money.”
That confidence was jeopardised on September 23 when Kwarteng and Truss unveiled a right-wing programme, inspired by 1980s US president Ronald Reagan, of 45 billion pounds ($50 billion) in tax cuts financed exclusively by higher debt.
Markets tanked in response, driving up borrowing costs for millions of Britons, and the Conservatives’ poll ratings have similarly slumped, leading to open warfare in the governing party mere weeks after Truss succeeded Boris Johnson.
“I think the game is up, and it’s now a question as to how the succession is managed,” senior Tory MP Crispin Blunt said on Channel 4.
Truss has been forced into a screeching policy U-turn which cost Kwarteng his job. But she depressed the bond markets even more with a painful press conference on Friday and the government was nervously awaiting the resumption of trading on Monday.
Bidding to placate investors, Kwarteng’s replacement Jeremy Hunt is now warning that taxes may in fact have to rise and is pressing for spending restraint by his cabinet colleagues even as Britons endure a cost-of-living crisis.—AFP
