After just 44 days in office, Liz Truss has announced her intention to resign as Prime Minister of the UK. Truss has been under pressure to resign following the collapse of her economic program, which was the core of her government mandate.
Truss was elected leader of the Conservative party and Prime Minister of the United Kingdom following the resignation of Boris Johnson resulting from mass condemnation over his covid office parties. Truss contested party leadership running on a platform of low taxes and increased government spending. The self-conflicting nature of her campaign promises was not missed by her primary conservative party rival, Rishi Sunak. During a televised debate, Sunak said “I don’t think the responsible thing to do, right now, is launch into some unfunded spree of borrowing and more debt”.
On Friday, September 23, 2022, Truss put forward a budget that outlined her economic plan. Massive tax cuts paired with fuel subsidies and increased military spending. When questioned, the PM refused to outline her plan for funding the programs. Speculation of large-scale borrowing and money printing went viral.
The following few days saw markets panic on speculation of hyperinflation. Increased levels of expected inflation led to higher costs of borrowing, which led to higher requirements for collateral and soon large financial institutions were selling off assets to fund collaterals while the British Pound crashed on financial markets. Overnight the markets began to see the British government as potentially insolvent.
With her approval rating reaching a low of -70%, the worst level ever recorded, Truss’s government was in deep trouble. The finance minister was fired and replaced by someone who announced a complete reversal of the economic policies of the Truss administration.
With calls for her resignation mounting, Truss has now thrown in the towel. This makes Liz Truss’s 44 days in office the shortest of any Prime Minister in UK history.
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