June 17, 2024

Truss sacks Finance Minister Quarteng - appoints successor

Truss sacks Finance Minister Quarteng – appoints successor

The Prime Minister intends to address the media in the afternoon. It is expected to roll back large parts of its recently announced tax plans that caused major economic turmoil.

Financial markets reacted violently to the tax cut plan

Financial markets rallied in September after significant tax cuts were announced without a counter-financing plan. The pound fell against the US dollar. The Bank of England has had to step in and buy government bonds on several occasions to keep their prices from falling and prevent pension funds from collapsing. Rising interest rates on home loans have exacerbated the cost-of-living crisis for many homeowners.

The government then reversed the repeal of the top tax rate and, after some hesitation, announced that it would present the full budget within weeks. But that temporarily calmed financial markets.

Can also wobble in truss position

Fed President Andrew Bailey recently announced the end of bond purchases for this Friday. According to some experts, he wanted to force the government. Financial markets responded positively to reports of a government turnaround.

It is questionable whether the truce will be able to calm financial markets and stabilize their position with the Chancellor of the Exchequer’s sacking and expected reversal. The British media has already speculated that his party may soon topple him.