How Truss destroyed her own premiership within weeks
Liz Truss’s resignation brings to an ignominious end her catastrophic tenure in Downing Street, which appeared doomed ever since Truss’s flagship economic agenda sent markets into panic and led to a fall in the value of the pound.
She won support from Conservatives members by promising low-tax, pro-growth policies – derided by her critics as a lurch towards trickle-down economics – but within weeks of coming to power she disavowed the plans in a humiliating pivot, firing her Chancellor Kwasi Kwarteng and ditching virtually all of the fiscal agenda in the wake of a market backlash.
It came after investors rejected an announcement by the Truss government in late September that it would slash taxes while ramping up borrowing in a bid to produce faster growth, citing concerns that the plan would push up inflation just as the Bank of England wants to bring it down.
Fears also crept in about the sustainability of government debt at a time of rapidly rising interest rates.
The pound crashed to a record low against the US dollar, while bond prices slumped, sending yields soaring. That pushed mortgage rates much higher, and brought some pensions funds to the brink of default.
The Bank of England was forced to announce three separate interventions to avoid a full-scale meltdown in the UK government bond market.
Truss meanwhile failed to regain control of an increasingly mutinous Conservative Party, and her Home Secretary Suella Braverman launched a blistering attack on her leadership after leaving the role on Wednesday.
A final chaotic display saw Truss allies accused of manhandling lawmakers to force them to vote against a fracking ban on Wednesday evening.
Truss departure plunges Britain deeper into chaos
Liz Truss’s departure ensures a fresh power struggle within the ruling Conservative Party, which has hemorrhaged public support for the past year and has now overthrown Boris Johnson and Truss in the space of a few months.
A trickle of Conservative MPs called on her to go and Truss ultimately bowed to the pressure on Thursday.
Britain now faces the prospect of a third different leader entering office since its last general election, an unprecedented scenario in modern peacetime that will lead to serious questions about the mandate of the government and increase a growing clamor for a fresh vote.
It is a spectacular fall from grace for a party that won a landslide victory under Johnson in a December 2019 election that was won on the then-leader’s promise to deliver Brexit.
A new leadership contest will take place on an expedited timetable soon, with Truss saying a new leader will be chosen within a week. Figures who could be in the running include Rishi Sunak, the former chancellor who lost to Truss during the summer race; Penny Mordaunt, the leader of the Commons who was second in the leadership contest behind Sunak until Truss overtook them both in the final round of voting; and Jeremy Hunt, the current finance minister who Truss turned to after sacking Kwarteng on Friday.
And a potential return to frontline politics for Boris Johnson has not been ruled out, with some of Johnson’s allies in the Commons claiming in recent weeks that moving to remove him was a mistake.
Liz Truss will become Britain’s shortest-serving prime minister ever
Liz Truss said outside Downing Street that she “set out a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit.”
“I recognise though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative party,” she said.
Truss said she has tendered her resignation to the King, and a leadership election will take place within a week.
That timeline would make her, by some distance, Britain’s shortest-serving prime minister ever.
WATCH LIZ TRUSS RESIGN:
BREAKING: Liz Truss quits as Britain’s prime minister
Liz Truss is set to become Britain’s shortest-serving prime minister ever, after announcing her intention to resign just six weeks into a disastrous term.
Downing Street to make statement
Liz Truss is expected to give a statement in Downing Street amid calls for her to resign as Britain’s prime minister after a disastrous six-week tenure.
Truss earlier met with the chair of the 1922 Committee of the backbench Conservatives, Graham Brady, Downing Street said on Thursday, according to PA Media. The group decides whether to call a vote of no confidence in the prime minister.
Truss’s government was earlier told it had “12 hours” to “turn the ship around” by Conservative lawmaker Simon Hoare, after a vote on whether to ban controversial fracking for shale gas descended into chaos.
Lawmakers reported that aides for Truss manhandled MPs into the voting lobby to force them to vote against the ban. The government initially presented the vote as a confidence motion in Truss’s government, but confusion remains about whether it was. A Downing Street spokesperson said on Thursday that Conservative lawmakers who didn’t participate in Wednesday evening’s vote will face disciplinary action, PA Media said.