According to reports, the UK’s Finance Minister Kwasi Kwarteng has been relieved from his position by Prime Minister Liz Truss. The Ghanaian-born Finance Minister spent only six weeks in office. Prime Minister Truss will also remove parts of their economic package, in an attempt to survive the economic and political pressure. The Prime Minister will hold a press conference to address the situation later today.
Kwarteng returned to the UK earlier than planned from his meetings with the IMF (International Monetary Fund) in Washington, to work on the UK economic plan.
On September 23, Kwarteng unveiled a new fiscal strategy, carrying out Truss’s proposal for larger tax cuts and regulatory reform in an effort to jolt the economy out of years of slow development. However, the market’s reaction was so fierce that the UK’s Bank of England was forced to step in. They had to stop pension funds from becoming embroiled in the confusion as borrowing and mortgage costs skyrocketed.
Since then, there has been increasing pressure on Truss and Kwarteng to change course. Polls revealed that support for their Conservative Party had plummeted, leading colleagues to explore whether they should be replaced.
Truss Administration
Truss’s administration started looking for methods to balance the books after her unfunded tax cuts lowered the value of British assets and garnered international criticism. However, British government bonds continued to rise, contributing to their partial recovery.
Chris Bryant, the head of the committee overseeing standards and privileges in parliament and a member of the opposition Labour party, said that it would be “despicable of Truss to sack Kwarteng for implementing her policies…”
The UK’s financial troubles have been mounting over the past several months. The country recently released its unemployment data, which reached a near 5-decade low of 3.5%. The decline is due to the exodus of labor markets.
Additionally, with inflation on the rise, there are serious fears of recession hitting the UK.