Skip to content
Search

Latest Stories

Ousting under-fire UK PM Truss would be 'disastrously bad idea', minister says

Truss, the 47-year-old former foreign secretary, was elected in September by Conservative members on a promise to snap the economy out of years of stagnation by cutting taxes and reforming areas such as planning, migration and employment.

Ousting under-fire UK PM Truss would be 'disastrously bad idea', minister says

British Prime Minister Liz Truss faced growing pressure on Thursday from lawmakers in her own party to rethink tax-cut plans that sent markets into turmoil, with one ally saying it would be a "disastrously bad idea" to oust her a month into the job.

Truss's economic package, announced last month, has caused a rout in the government bond market, with some investors and Conservative Party lawmakers calling on her to reverse a plan for 43 billion pounds ($48 billion) of unfunded tax cuts, including a move to hold corporation tax at just 19%.


The government has said it will stick to most of its tax cut plans while also protecting public spending, but economists and critics say something has to give.

On Thursday, foreign minister James Cleverly shied away from confirming or denying whether the government would retain its corporation tax policy, saying only it was important to keep businesses competitive.

"The chancellor will come to the despatch box," he said when asked by Sky News whether the corporation tax plan would definitely stay. "I think it's absolutely right that we've made it clear that we want to invest in businesses."

There has been vocal criticism of the government's overall plans from within the Conservative Party as polls show its support has collapsed. Newspapers reported that some lawmakers who never wanted Truss to replace Boris Johnson as leader in the first place already wanted her out.

"I think that changing the leadership would be a disastrously bad idea, not just politically but also economically, and we are absolutely going to stay focused on growing the economy," Cleverly said of Truss.

Truss, the 47-year-old former foreign secretary, was elected in September by Conservative members on a promise to snap the economy out of years of stagnation by cutting taxes and reforming areas such as planning, migration and employment.

But a fire sale in the government bond market has driven up borrowing costs and mortgage rates and forced the Bank of England to intervene to protect pension funds.

"I can see only one outcome: the withdrawal of most of the mini-Budget," Paul Goodman, editor of the influential ConservativeHome website said.

The government bond market saw yields on longer-duration gilts hit 20-year highs on Wednesday before the BoE stepped in with its biggest intervention in a single day since launching its emergency bond-buying programme in late September. Trading was calmer on Thursdaywith yields falling.

REALLY ILL PATIENT

The Bank's bond purchases are due to end on Friday but many analysts think it will have to maintain some kind of support with investors still alarmed by the government's plans.

"You know, a central bank is like a doctor: if the patient is really ill, and even if the patient has misbehaved, it is very difficult for a doctor to walk away," said Mohamed El Erian, chief economic adviser at Allianz and president of Queens' College, Cambridge.

"So the reality of central bank emergency interventions is that they tend to continue for longer than what is expected. And central banks simply will not walk away," he told BBC radio.

Finance minister Kwasi Kwarteng is due to present a full fiscal policy to parliament along with borrowing and growth forecasts on Oct. 31, but El Erian cautioned that damage was being done in the meantime.

"People's confidence and business confidence is coming down. So if we wait another three weeks, there will be more damage not just to actual growth, but also potential growth," he said.

(Reuters)

More For You

british-muslims-iStock

The study noted that this identification was not due to any doctrinal obligation but was influenced by the perception that many Muslims do not feel fully accepted as British. (Representational image: iStock)

iStock

Majority of British Muslims identify by faith first, study finds

A STUDY by the Institute for the Impact of Faith in Life (IIFL) has found that most British Muslims identify primarily with their religion rather than their nationality.

The research, based on a survey of 815 British Muslim adults by Whitestone Insight, revealed that 71 per cent of respondents identified as Muslim first, while 27 per cent identified as British, English, or Scottish first.

Keep ReadingShow less
Car Tax Changes: EV Owners Now Required to Pay for the First Time

Owners of electric vehicles registered on or after 1 April 2025 will pay £10 for the first year, followed by the standard VED rate of £195 from the second year. (Representational image: iStock)

iStock

Car tax changes take effect: EV owners to pay for first time

FROM today, 1 April 2025, electric cars, vans, and motorcycles in the UK will be subject to Vehicle Excise Duty (VED) for the first time.

The change, introduced in the 2022 Autumn Statement by former Conservative Chancellor Jeremy Hunt, aims to make motoring taxation fairer.

Keep ReadingShow less
scotland-minimum-wages-iStock

Full-time workers on the National Living Wage will receive an annual pay increase of £1,400 in real terms. (Representational image: iStock)

iStock

Wage increase takes effect for thousands of workers in Scotland

HUNDREDS of thousands of workers in Scotland will see a pay increase as new National Living Wage and National Minimum Wage rates take effect from Tuesday.

The changes will benefit approximately 220,000 people, according to STV News.

Keep ReadingShow less
uk-energy-bill-iStock

Water bills, energy prices, and council tax are rising, while the minimum wage has also increased (Representational image: iStock)

iStock

April bill increases put financial strain on single parents

A RANGE of essential household bills are increasing from April, with Citizens Advice warning that single parents will be among the hardest hit.

Water bills, energy prices, and council tax are rising, while the minimum wage has also increased, BBC reported.

Keep ReadingShow less
Netflix drama Adolescence to be screened in UK schools
Stephen Graham and Owen Cooper in 'Adolescence'
Netflix

Netflix drama Adolescence to be screened in UK schools

THE NETFLIX drama Adolescence will be shown in UK secondary schools as part of efforts to address harmful online influences on young boys, officials announced on Monday.

The show has sparked debate over the impact of toxic and misogynistic content on the internet. Prime minister Keir Starmer met the show's creators, charities, and young people at Downing Street, calling the initiative an important step in starting discussions about the content teenagers are exposed to online.

Keep ReadingShow less