The mini-budget and market chaos 

Just 48 hours into the job as Prime Minister she was met with crisis number one: Queen Elizabeth II died, placing the country into official mourning and pressing pause on UK politics. 

When official mourning ended, her government unleashed a wave of radical policies and a mini-Budget of £45 billion in tax cuts. The measures laid out in the mini-budget included the highly controversial scrapping of the top rate paid by the highest earners – a move which would have benefitted the wealthy only. 

The PM’s government argued that by cutting personal and corporate tax it will trigger investment in the UK and kick-start the economy. 

But the plan fell apart almost immediately, with the pound plummeting to its lowest level in nearly four decades. 

Then the Bank of England had to intervene, announcing they would buy government bonds in an attempt to “restore orderly market conditions” and to prevent “dysfunction” following the cuts and then the plunge in the pound.

The International Monetary Fund (IMF) issued a rare rebuke – saying the UK’s tax-cutting plans would “likely increase inequality.”

The Lady not for turning 

“U-turn if you want to. The lady’s not for turning,” Liz Truss ally Simon Clarke said of Truss during the Tory leadership campaign. But it turns out she really is.

Truss made a massive U-turn on scrapping the 45p rate – arguing “We get it and we have listened”. But in reality, it was an embarrassing moment for Truss and her government. 

Following the sacking of her chancellor Kwasi Kwarteng, Truss delivered another U-turn on part of her mini-Budget. She announced that she will be reversing her plan to scrap an increase in corporation tax and admitted the mini-budget had gone “faster and further” than many expected. The PM went on to say that keeping the increase in corporation tax it will raise £18bn in taxes for the country per year. 

More embarrassingly, Rishi Sunak announced the tax would climb from 19% to 25% in April 2023. He said it would be fair to ask companies to contribute more after the government spent billions of pounds supporting them during the pandemic. But during the campaign – she lambasted Sunak for that policy and pledged to reverse the decision before her latest U-turn. 

Her future was at stake during the press conference and perhaps it was her performance at the conference that sealed her fate. Despite the sacking of a chancellor, the appointment of another and the U-turn, the Prime Minister’s speech and Q&A were astonishingly short. She failed to hold herself accountable, she failed to explain herself, and she failed to engage in conversation. 

Reporters were visibly surprised at the PM’s reluctance to accept questions – she answered only four! It may be a tough time for the PM but reassuring the markets, the public and the party is vital to her longevity. It matters for credibility and accountability. 

One Tory MP texted the BBC’s political editor Chris Mason: “I voted for Liz but I think she just appointed her successor. Awful. Sadly think that hastened her demise.” 

Chancellor sacked in bid to save her premiership 

When Truss sacked her chancellor Kwasi Kwarteng, there was a real feeling that Liz Truss was clinging on and desperately trying to save her own job. 

Despite her several attempts to calm the markets, including ditching her 45p tax rate, she has struggled in the face of economic and political pressure. 

And by sacking the chancellor, Liz Truss has thrown her ally under the bus in a desperate bid to save herself. 

Kwasi Kwarteng is now the second-shortest serving chancellor in UK history. 

Whilst Kwarteng may have offered up the mini-Budget it was the prime minister who agreed on and signed off on it. Despite replacing her chancellor it remains doubtful that Truss will be able to unite her party, there is a clear lack of support amongst her Tory MPs in part because the plan to cut taxes was central to the campaign that saw her beat out Rishi Sunak to replace Boris Johnson as prime minister.