Another U-turn when Prime Minister Liz Truss fights for a job

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UK’s new Finance Minister Jeremy Hunt has said some taxes will need to be increased and tough spending decisions will be needed, and Prime Minister Liz Truss has been forced to stay in office just over a month into her term. In the midst of the struggle, it suggests further retractions.

In an attempt to soothe financial markets after three weeks of turmoil, Truss sacked Treasury Secretary Kwassi Kwarten on Friday and scrapped parts of the controversial economic package.

Poll ratings for both the ruling Conservative Party and the prime minister have been dire, with many of her own MPs asking how, not if, Mr Truss should be sacked, which is why she is on Hunt. I relied on him to help save the under-40 prime minister’s office. A few days after her inauguration.

Mr Hunt said Mr Truss and Mr Qualtengue had made a mistake, and when he toured TV and radio studios to give a candid assessment of the situation facing the country, he said, “I had to make a very difficult decision. will be,’ he said.

“People want it, the market wants it, the country needs it now is stability,” Hunt said.

“No prime minister can control the market. will be needed.”

Truss won a leadership contest to replace Boris Johnson on the platform for deep tax cuts to stimulate growth, Kwarten formally announced last month. The market went into a meltdown because it didn’t.

She has now abandoned her plan to cut taxes for high-income earners and said business will be taxed more, abandoning her proposal to keep it at current levels. But it’s not clear if that’s enough to keep investors happy.

Hunt is set to unveil the government’s medium-term budget plan on October 31, a key test of its ability to show that it can restore credibility to economic policy. He said it was possible to make further changes to Truss’ plans.

“Giving certainty about finances, how I will pay every penny I get from paying taxes, and the spending decisions that we make are very helpful for me to give certainty and create stability. It’s an important way,” he said.

He warned that spending won’t go as high as people would like, and that all government departments need to be more efficient than they plan.

He said he will sit down with Treasury officials on Saturday before meeting with Truss on Sunday to review the plan.

Kwarteng’s Sept. 23 fiscal report sparked a rebound in financial markets, forcing the Bank of England (BoE) to step in to prevent pension funds from being dragged into turmoil as borrowing costs surged. I did.

Mr. Hunt is an experienced minister and is seen by many in his party as a safe hand.

“We’ve made some mistakes in the last few weeks. That’s why I’m sitting here. Lowering the top tax rate at a time when we’re asking everyone to make sacrifices was a mistake.” said.

Mr Hunt said it was also a mistake to “blindly” plan the tax without letting the independent financial oversight body, the Office of Budget Responsibility, check the numbers.

Hunt said Truss should be judged by election and not on his performance in the past 18 days, but in the next 18 months.

But she may never get that chance. In her leadership election, Truss won her support of less than a third of Conservative MPs, but has nominated her supporters since her inauguration.

The next significant test will take place on Monday and will mark the first time since 28 September that the UK government bond market will function without urgent buying support provided by the BoE. Gilt prices plunged late Friday after Truss’ announcement.