Political Earthquake in Britain
The political earthquake in Britain has made the country’s recent economic and political events extremely complicated. The astonishing consequences of the budget presented by Kwasi Kwarteng, the British Chancellor of the Exchequer, were not anticipated to be so enduring and impactful even by the most pessimistic experts. While the Bank of England’s decisions had managed to contain some of the crises caused by the chaotic and dangerous budget proposed by Liz Truss’s government, new serious risks emerged for pension funds on one side and mortgage applicants on the other. The Chancellor’s trip to the joint International Monetary Fund and World Bank meeting added to the crises.
Officials from the two international organizations, by supporting the Bank of England, effectively rejected the policies and plans of Liz Truss and her Chancellor. The situation escalated to the point where Kwasi Kwarteng had to abruptly leave the meeting and make an emergency return for a session with Liz Truss. Many believe that Liz Truss’s government will retract a significant portion of its policies. It was under these conditions that Kwasi Kwarteng, as the second most senior official in the British government, upon his hasty return from the U.S., contrary to his expectations, was not alongside the Prime Minister in the session announcing changes to government policies; Liz Truss had dismissed him.
The plan to support Britons in countering the rise in energy prices and other Truss’s plans entail costs exceeding 60 to 70 billion pounds, and the means to offset these costs are not clearly defined. The British government, in these circumstances, neither explicitly speaks of reducing public spending and cutting the budget for public services nor shows any willingness 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 have lost their serious resolve to support her. Even the prominent cabinet members who supported her until just last weekend have remained silent in the past two days. The murmurs of Liz Truss’s downfall have now become newspaper headlines.