His hasty return Quasi Kwarteng from New York on Friday marked the start of a busy day in the UK.

Hours later, it was announced that he had been fired from the finance ministry and replaced by a former minister and candidate from a former party leader. Jeremy Huntwhile Prime Minister Liz Truss gave an episodic press conference announcing a complete change in her government’s economic planning.

Controversial “Mini-Budget”

Liz Truss succeeded Boris Johnson as prime minister after a party vote by members of the Conservative Party. Tras’ election campaign was largely based on a tax cut announcement.

On September 23, a close associate of Thras and newly appointed finance minister kvarteng announced a so-called “mini-budget” that included, among other things, an income tax cut, the elimination of the 45% top tax rate, and the reversal of the corporate income tax increase that the Johnson government had announced.

Overall, the tax cut is estimated at £45bn, the biggest tax cut in 50 years.

In fact, as Will Hutton writes in the Guardian, kvarteng announced that the British government would borrow about £400 billion over five years to fund these tax breaks. In the run-up to the election, another top candidate to succeed Johnson and former Treasury Secretary Rishi Sunak called Garbage’s proposals “a children’s story economy.”

Markets agreed with Sunak as the UK has been suffering from financial difficulties since the Kwarteng announcement. The pound fell to a new all-time low against the dollar, hitting almost 1:1 ($1.04), and UK bond yields jumped on both 10- and 30-year bonds.

“Markets have decided that Kwarteng’s tax cuts will lead to higher interest rates and that worsening public finances will hurt the long-term growth of the UK economy,” Paul Dales told the BBC.

The “Mini Budget” was also not accompanied by any text from the Office for Budget Responsibility, as usual, which caused a strong reaction both in the House of Commons and in the markets.

The Bank of England stepped in and launched a bond-buying program, openly challenging the government, saying in a statement that there was significant risk following the announcement of a “mini-budget” for the country’s pension funds.

“A sharp sell-off in government bonds caused a panic in British pension funds, which could not cope with falling prices. This will have a major impact on mortgages,” writes Politico.

Kwarteng on 3 October, just 10 days after its first announcement, was forced to withdraw its proposal to remove the top 45% tax rate for those earning over £150,000.

“The credibility of the British economy at the international level is clearly undermined. I was asked with great interest, horror and sadness how the UK fell so quickly,” writes Chris Giles in the Financial Times.

Exile of Quarteng

As early as Thursday, there were rumors in Westminster about the government’s imminent “ass down” as Truss now had an open front with many MPs in her own party.

As early as Tuesday, the Economist wrote that “Lise Truss has firmly taken her place in British political history. No matter how long she stays in office, she is poised to go down in history as the longest serving prime minister. Thras took office as prime minister on 6 September. On September 23, she blew up her own government with a package of unwarranted tax breaks and energy price guarantees. If you subtract 10 days of mourning after the death of Queen Elizabeth, she retained control for seven days. On the lifespan of lettuce.

The Times reported on Thursday that senior figures in the Conservative Party were openly discussing replacing Truss with a new leadership made up of Mr. Sunak and Penny Mordant.

Specifically, the BBC reports that two Conservative MPs said on Thursday that “this is rua mat, we stepped on it” and that “many of these measures should be thrown in the trash.”

So when Kwarteng flew out of New York, on the day the Bank of England announced it was ending its bond-buying program, according to James Kirkup in the Spectator, it was clear that something was about to change, despite management’s announcements. Prime Minister that everything is in order and that Truss and Kwarteng are “totally agreed”.

At 11:30 a.m. UK time, shortly after arriving at Heathrow, Times political editor Stephen Swynford announces that Liz Truss has fired Kwarteng. Kwarteng, who served as minister for only 38 days, becomes the second shortest-term finance minister since 1827. However, this is not very comforting for him, since the record holder Ian McLeod died of a heart attack 30 days after the start of the ministry.

“You asked me to step aside. I agreed,” Kvarteng wrote in a letter to Trass.

“Today’s dismissal of Kwasi Kwarteng is the result of the Bank of England’s refusal to continue to support and provide an artificial shield to the government, protecting it from the consequences of the September economic report, which undermined its confidence,” Kirkup writes.

“The political death of Kvarteng seems to go down in political history as a shameful story. A minister so confident in his convictions and so intolerant of the opinions of others made a number of avoidable mistakes, most notably the collapse of the entire British economy,” writes Guardian political editor Peter Walker.

The future of Thras

In place of Quarteng Truss appointed Jeremy Hunt. A big name among the Conservatives, Hunt tried twice to be elected leader of the party. He is considered one of the most moderate representatives of the conservatives, expressing rather the centrist space of the party.

“His appointment is a sign that Truss is looking to build support within the party,” Walker writes in the Guardian, stressing that it is also a response to criticism from her MPs that she chose her ministers based on loyalty to her rather than their ability. .

Truss herself, at a press conference following Kwarteng’s dismissal, confirmed that, contrary to her campaign promise, she would raise corporate tax, saying the proposed mini-budget reforms were “more innovative than the market expected.” Cathy Balls of the Spectator wrote that the press conference was “painful”.

“Instead of dispelling the veil of distress that had fallen on Thras’s premiership, her rushed press conference only made matters worse. She was nervous. How much time do they have left? asks Christopher Hope of the Telegraph.

The big question now is whether Thras herself will survive.

She answered persistent questions from the press that she was “absolutely determined to achieve what she promised.” Others are less convinced.

“…when he removes the lightning rod, do you know what happens then? She’ll be struck by lightning,” one Conservative MP told BBC’s Chris Mason, who stressed that for many MPs there was no turning back for the prime minister, given the scale and speed of the devastation she caused.

“The theory that the prime minister can scapegoat his minister and move on is a fallacy. This is her own vision. He went along with all the details and defended them,” another Tory MP told Sky News.

The Telegraph notes that now the conservatives are openly discussing the resignation of Thras from the helm of the country.

“He does nothing right and influences the country and the party. The atmosphere is gloomy and there are open discussions about when he should leave. More and more people agree with me that this should be done soon,” the deputy told the newspaper.

The opposition openly calls for a national electionsboth Keir Starmer’s Labor Party and Ed Davey’s Liberal Democrats.

Fraser Nelson, in an article for the Telegraph, notes that the conservatives are not particularly disposed to the elections.

“The only thing we all agree on is that elections cannot be held now. Too many of us will lose ground,” says one, and another that “if we continue like this, we will lose by a margin of 250 positions.”

But there are voices among the Conservatives who know that a third change of prime minister without an election would be problematic for the party.

“We might as well accept a dictatorship because it is the most anti-democratic proposal imaginable,” writes Conservative Nadine Dorries on MPs’ WhatsApp with a hint of sarcasm.

In addition, the Financial Times notes that despite the change in direction from the Truss, there is now a “tens of billions of pounds black hole”.

The only thing you can be sure of is that next week will be decisive for Thras. We observe…

Sources: Economist, Financial Times, The Spectator, Politico.