UK PM Truss says she will resign
UK Prime Minister Liz Truss said on Thursday (Oct 20) she was resigning, brought down by her economic programme that sent shockwaves through the markets and divided her Conservative Party just six weeks after she was appointed.
Speaking outside the door of her Number 10 Downing Street office, Truss accepted that she could not deliver the promises she made when she was running for Conservative leader, having lost the faith of her party.
“I recognise though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative Party,” she said.
“This morning I met the chairman of the 1922 Committee, Sir Graham Brady. We’ve agreed that there will be a leadership election to be completed within the next week. This will ensure that we remain on a path to deliver our fiscal plans and maintain our country’s economic stability and national security.”
A leadership election will be completed within the next week to replace Truss, who is the shortest serving prime minister in British history. George Canning previously held the record, serving 119 days in 1827 when he died.
Earlier, Conservative Party officials had gathered at Downing Street while a growing number of her own lawmakers called on her to quit.
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Appointed on Sep 6, Truss was forced to sack her finance minister and closest political ally, Kwasi Kwarteng, and abandon almost all her economic programme after their plans for vast unfunded tax cuts crashed the pound and British bonds. Approval ratings for her and her Conservative Party collapsed.
On Wednesday, she lost the second of the government’s four most senior ministers, faced laughter as she tried to defend her record to parliament and saw her lawmakers openly quarrel over policy, deepening the sense of chaos at Westminster.
New Finance Minister Jeremy Hunt is now racing to find tens of billions of pounds of spending cuts to try to reassure investors and rebuild Britain’s fiscal reputation as the economy heads into recession and with inflation at a 40-year high.
The pound and gilts pared some of its gains after Truss’ announcement, capping weeks of speculation that she would not be able to remain in her post.
Sterling traded around 0.5 per cent higher on the day, while the yield on 10-year bonds was at 3.81 per cent after falling as much as 12 basis points on the day to 3.76 per cent ahead of the announcement.
The administration has already reversed most of Truss’ vast unfunded tax cut pledges, curbing volatility in the gilt market and helping the pound to recover to levels seen before she unveiled her mini-budget in September. Her resignation could help cool nerves further as investor await clarity on the projected size of the budget deficit.
The government is due to publish its medium-term economic plan and forecasts from the fiscal watchdog slated at the end of the month. Those figures will also influence the Bank of England’s thinking when it sets rates next month.
Meanwhile, Hunt ruled out standing for the leadership of the Conservative Party. It is a reiteration of a position Hunt voiced earlier in the week, when he told Sky News he did not aspire to succeed Truss.
“I rule it out, Mrs Hunt rules it out, three Hunt children rule it out,” he said.
Rishi Sunak and Penny Mordaunt, two contenders in Britain’s previous leadership contest this year, are believed to be in the running to become the nation’s next prime minister, Sky News reported.
Separately The Guardian newspaper’s political editor reported that former minister Michael Gove was “ruled out” for the leadership.
UK opposition leader Keir Starmer demanded an immediate general election. “The Tories cannot respond to their latest shambles by yet again simply clicking their fingers and shuffling the people at the top without the consent of the British people. We need a general election – now,” the Labour party leader said.
The Conservative Party “has shown it no longer has a mandate to govern,” he added. “After 12 years of Tory failure, the British people deserve so much better than this revolving door of chaos.
“Now, they have crashed the economy so badly that people are facing £500 (S$802) a month extra on their mortgages. The damage they have done will take years to fix.
“Each one of these crises was made in Downing Street but paid for by the British public. Each one has left our country weaker and worse off,” he said. REUTERS, BLOOMBERG, AFP
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