Summary of Liz Truss’s Short Premiership and the Mini-Budget Turmoil

Liz Truss has been sharing her version of events leading to the calamitous end of her 49-day tenure as UK’s Prime Minister. During her short stint, Truss, alongside her Chancellor Kwasi Kwarteng, introduced a controversial ‘mini-Budget’ aimed at spurring economic growth through tax cuts, which included significant reductions in corporate and income taxes. The Budget, however, led to financial market chaos, with soaring interest rates and a plummeting pound.

Kwasi Kwarteng faced harsh rebukes from global economic figures, including US Treasury Secretary Janet Yellen and IMF Managing Director Kristalina Georgieva, amidst the turmoil. Despite their initial camaraderie, Truss quickly replaced Kwarteng with Jeremy Hunt upon his return to the UK.

Truss’s book, “Ten Years To Save The West,” lays blame on financial institutions, specifically the Bank of England, Treasury, and Office for Budget Responsibility (OBR), for sabotaging her economic plans. However, financial analysts argue that it was the financial markets that ultimately judged and acted against her policies.

The mini-Budget’s backlash included a rise in mortgage rates and instability for pension funds using Liability-Driven Investments (LDIs). Amidst the ensuing crisis, the Bank of England had to implement emergency measures to stabilize the financial system.

Truss continues to argue that the market’s reaction was exacerbated by poor decisions from the Bank of England and a lack of support from the OBR. In her narrative, she criticizes Andrew Bailey, the Bank of England’s governor, for his handling of the crisis and suggests a conspiracy within the financial establishment against her government.

Ultimately, the debacle called into question the Conservative Party’s economic stewardship and had long-term political repercussions.