Political Earthquake in Britain
The political earthquake in Britain has made the country’s economic and political events highly complicated in recent days. Even the most pessimistic experts did not imagine the far-reaching and impactful consequences of the budget presented by Kwasi Kwarteng, the UK’s Chancellor of the Exchequer. While the Bank of England’s decisions had partly contained the crises resulting from the chaotic and dangerous budget proposed by Liz Truss’s government, serious new risks emerged for pension funds on one hand and mortgage applicants on the other. The Chancellor’s trip to the joint meeting of the International Monetary Fund and the World Bank added to the crises.
Officials from the two international organizations, by supporting the Bank of England, effectively rejected Liz Truss’s policies and plans along with her Chancellor. The situation reached a point where Kwasi Kwarteng was forced to leave the meeting quickly and return urgently for a session with Liz Truss. Many believe that Liz Truss’s government will retract a significant portion of its policies. In this situation, Kwasi Kwarteng, as the second-highest-ranking official in the UK government, found himself unexpectedly not accompanying the Prime Minister in the session announcing changes to government policies upon his hasty return from the US. Liz Truss has dismissed him.
The plan to support Britons in coping with rising energy prices and other Truss plans entail costs exceeding 60 to 70 billion pounds, and the means to offset these costs are not clearly defined. The UK government, in this situation, neither explicitly speaks of reducing public spending and cutting the budget for public services nor shows any intention to increase taxes on the wealthy and especially energy companies.
Things have become very difficult for Liz Truss. Prominent members of her party have broken their silence in the face of this situation and lost their serious intention to support her. Even the prominent cabinet members who supported her until just last weekend have remained silent in the past two days. The whispers of Liz Truss’s downfall have now turned into newspaper headlines.