British Treasury Secretary Kwarteng resigns

Prime Minister Liz Truss is under pressure as the man at the heart of her reforms is stepping down. And more changes are possible.

British Finance Minister Kwasi Kwarteng has resigned in the face of continued criticism of his budget plans. He did this after Prime Minister Liz Truss asked him to do so, Kwarteng said on Friday. “They asked me to resign as their finance minister. I accepted.” He will support Truss and his successor. Truss’ ideas are correct, he writes on Twitter. A successor for Kwarteng has not yet been determined.

As British media reports, Prime Minister Liz Truss would like to announce at a press conference in the afternoon that she will withdraw large parts of the economic plans that she announced just a few weeks ago.

The head of government, who has only been in office since September 6, has come under heavy pressure from within her own ranks because of the projects financed solely on debt.

According to the BBC Kwarteng is now the second shortest-serving finance minister in the UK. Only Iain Macleod was in office for a shorter time in 1970. He died of a heart attack 30 days after taking the post. Counting today, Kwarteng has 39 days.

Pound down

The financial markets had reacted violently after the announcement of significant tax cuts without a counter-financing plan in September. The pound plummeted against the US dollar. The Bank of England has had to intervene and buy government bonds on several occasions to stem their price declines and prevent pension funds from collapsing. Rising interest rates on home loans exacerbated the cost of living crisis for many homeowners.

The government then withdrew the planned abolition of the top tax rate and, after some hesitation, announced that it would bring forward the presentation of the entire budget by a few weeks. But that only calmed the financial markets temporarily. Fed chief Andrew Bailey recently announced an end to bond purchases for this Friday. According to some experts, he wanted to force the government to give in. Financial markets reacted positively to reports of a government reversal.