UK Prime Minister Liz Truss has resigned after a failed budget cut and plan to boost spending resulted in financial markets turmoil pushing her to retract as her political authority disintegrated. Truss’s resignation comes barely six weeks since she took reigns as UK’s PM, making her the shortest-serving premier.
In a statement outside Downing Street, Truss said:
I recognize 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 announce that I am resigning as leader of the Conservative Party.
Truss’ resignation leaves the Conservatives’ anticipated budget on October 30 on balance despite the outgoing prime minister promising that the handover will ensure the country is on the path to deliver its fiscal plans.
Commenting on the resignation, HYCM Chief Market Analyst Gile Coghlan said:
After just 44 days in office, it appears that the markets and a party in open revolt have sealed Liz Truss’s fate. Although Truss was brought in to usher in an era of growth and ‘trickle-down economics’, her strong pro-growth policy was poorly timed, sending the UK bond markets into a sharp sell-off as her policies fanned the flames of surging inflation.
Interestingly the Bank of England intervened in bond markets to address instability. However, whether the BoE will hike interest rates remains to be seen. Also, Truss’s resignation is likely to be slightly GBP positive but will depend on her successor. The UK bond market had already received support following rumors of the prime minister’s resignation.
Although Truss’ tenure was brief, she caused economic damage, which will take a long to correct. Her vision for the economy was misjudged and has worsened the burden on millions of Britons.
ZIPZERO co-founder Mohsin Rashid said in a statement:
Inflation has returned to the 40-year high seen in July and the Bank of England is set to raise interest rates faster than anticipated. Support on energy bills – Truss’ first and flagship policy – has been scaled back and mortgage rates have skyrocketed. These are hugely challenging times.
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