Truss may have sealed their fate while the UK is in chaos

The ground beneath British Prime Minister Liz Truss’ feet is crumbling, leaving a yawning credibility gap. A catastrophic mini-budget has brought unprecedented chaos to the financial markets. She was forced to turn her economic strategy on its head, jettisoning Finance Minister Kwasi Kwarteng in a desperate bid to salvage her position as prime minister.

But in doing so, she may have also destroyed any chance of her own long-term survival.

Losing a third Treasury Secretary in four months is suboptimal in the face of a cost-of-living crisis, a pandemic and a markets meltdown. Tory backbencher Roger Gale asked why she sacked Mr Kwarteng over the implementation of her economic policies.

“It’s hard to understand why the Prime Minister sacked her Chancellor – a good man – for promoting the policies on which she was elected,” he mused.

Many Tory MPs believe Ms Truss might not survive the humiliation of a U-turn by too many.

After riding the waves of finance like Canute, she finally had to accept that the corporate tax rate would go from 19 percent to 25 percent.

It didn’t help that it was a key statement from former Chancellor Rishi Sunak – her former rival for party leadership.

The seven-minute press conference Ms. Truss held to announce the about-face was a sad spectacle. Mr Kwarteng’s wave spoke to a higher frequency of chaos than even Boris Johnson had registered.

Less than 24 hours earlier, Mr. Kwarteng said he would “100 percent” stay on the job. But this is about politics, not personalities, and saving an economy, not a hapless prime minister. The experienced Jeremy Hunt, who will replace Mr Kwarteng, must now try to stabilize a dangerously listed Tory ship. With Labor leading up to 30 per cent in opinion polls, Ms Truss’ best chance lies in the fact that her party would be engulfed if an election were called.

She had hoped to take radical steps to shock the economy from years of stagnant growth, but her plan has rallied enough to have left the country stunned and economic dismay.

Her days are numbered unless she finds a package of spending cuts and tax hikes that can soothe investors’ frayed nerves. The task then is to win every parliamentary vote that follows in the House of Commons to pass the bill. The concern is that so much damage has been done that the correction could be even more severe than planned.

Boris Johnson’s regime has been criticized for a cocoon of privilege that has kept the public inaccessible. Ms. Truss faces similar allegations. Britain is clearly deeply divided. A certain group of people are doing well, too many are not.

The turmoil in London is a textbook example of how easy it is to shake a country’s reputation for economic governance and institutional stability — and how difficult it is to regain it. Truss may have sealed their fate while the UK is in chaos

Fry Electronics Team

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