British Prime Minister Liz Truss fired her finance minister Kwasi Kwarteng on Friday and scrapped parts of their economic package in a desperate bid to stay in power and survive the market and political turmoil gripping the country.
Kwarteng said he had resigned at Truss’s request after being forced to rush back to London overnight from IMF meetings in Washington.
Truss, in power for only 37 days, then told a news conference she would now allow a key business levy to rise from next year, raising 18 billion pounds, as she accepted she had gone “further and faster” than markets had been expecting.
“We need to act now to reassure the markets of our fiscal discipline,” she said.
Truss appointed Jeremy Hunt, a former foreign and health secretary, to replace Kwarteng.
“You have asked me to stand aside as your Chancellor. I have accepted,” Kwarteng said in his resignation letter to Truss, which he published on Twitter.
She said in response: “As a long standing friend and colleague. I am deeply sorry to lose you from the government.
“We share the same vision.”
The pound slid against the dollar after she spoke, trading 1.2% lower on the day at $1.1198 and two-year British government bonds, or gilts turned negative.
The plan for unfunded tax cuts crushed UK assets and drew international censure, but the pound and gilts have started to recover since the government started looking for ways to balance the books.
Kwarteng is the country’s shortest serving chancellor since 1970, and his successor will be the fourth finance minister in as many months in Britain, where millions are facing a cost of living crisis.
