Truss out as British PM

Liz Truss has spent just 45 days as Prime Minister of the United Kingdom and took less than two minutes to announce her resignation.

Ms Truss’s exit follows weeks of turmoil over her government’s plans to boost growth in what is one of the world's biggest economies, with proposals including a major subsidy program for energy and a package of tax cuts.

But those plans sparked turmoil in bond markets and proved highly unpopular.

Speculation had built that Ms Truss’ position was untenable.

“I can not deliver the mandate on which I was elected by the conservative party,” she told the press outside the prime minister’s home at 10 Downing Street in Westminster.

Ms Truss said she was resigning as leader of the Conservative Party, with a rapid election for a new party leader to take place within the next week.

That will decide her replacement as head of government of the G7 member economy.

U-turn 

Last week, Ms Truss was forced to jettison her Chancellor of the Exchequer Kwasi Kwarteng.

As the government’s treasurer, Mr Kwarteng had launched the ambitious program of tax cuts the pair had labelled a plan to restore growth in the UK.

That was quickly followed by a sharp rise in yields on British government borrowings as bond market investors worried debt and deficits would spiral out of control.

The Bank of England was forced to intervene to stabilise bond yields- those are the interest rates governments pay on their borrowings.

The pound also dived.

After Mr Kwarteng's departure, Jeremy Hunt was appointed as Chancellor, and Mr Hunt moved swiftly to wind back the tax reform program and clamp down on planned energy subsidies.

All of that was intended to ensure stability, he said.

The message was similar from Ms Truss as she stepped aside Thursday evening Perth time.

The quick leadership election would “ensure we remain on a path to deliver our fiscal plans and maintain our country’s economic stability and national security,” she said.

Number Five

Whoever succeeds Ms Truss will be the fifth British prime minister of the Conservative Party since David Cameron wrestled office from UK Labour in 2010.

Mr Cameron was far and away the longest serving of the group, winning a second election as leader in 2015.

But he quit after the country’s shock decision to vote to leave the European Union in the 2016 Brexit referendum. 

Theresa May was next in line, quickly finding herself wedged between those in her party who wanted to remain close to the EU and a second group with the motto “Brexit means Brexit”.

Ms May’s authority was also shredded when a snap election in 2017 was much more closely-run than expected, cutting her majority in parliament.

She was followed by Boris Johnson, who had campaigned to leave in the Brexit referendum, and who was successful in breaking the Brexit deadlock.

Mr Johnson, however, found himself under pressure for handling of the pandemic, with garden parties in his office during lockdown and an adviser embarking on a cross-country drive when the rest of the country was told to stay home.

Ms Truss took the reins in a high-inflation environment and amid increasing political instability in Europe after the Russian invasion of Ukraine.

The former Shell employee and deputy director of think tank Reform moved swiftly on her own reform program as PM.

That had included a cut to the rate of income tax for the highest earning bracket of payers, a 1 cent per pound reduction in the base rate of income tax, and lower company taxes.

Other moves included VAT-free shopping for tourists and a lower tax on dividends.

Almost all of those plans were moved to the junk pile in recent days.