On Wednesday, U.K. Prime Minister Liz Truss said she’s a fighter, not a quitter.
On Thursday, she quit.
“I cannot deliver the mandate on which I was elected by the Conservative Party,” said Truss outside of 10 Downing Street.
Truss said she will exit as soon as a hastily drawn contest to replace her is held, by next week. The shortest-serving prime minister in U.K. history resigned after just six weeks of her premiership.
Truss’s position became untenable after the financial market’s rejection of the mini budget presented on September 23 by Kwasi Kwarteng, her chancellor of the exchequer, who she quickly fired. Wednesday’s chaotic vote in parliament on fracking was the last straw.
Rishi Sunak, the former chancellor who finished second in the last leadership contest, is the front-runner in betting markets to replace her. Sunak had warned that Truss’s financial policies would create a crisis in financial markets.
They did, though his prediction of an International Monetary Fund rescue did not come to fruition.
New Chancellor of the Exchequer Jeremy Hunt withdrew nearly all of the ill-fated £45 billion worth of tax cuts. He also pared back the duration of energy price support for consumers, to six months, and said more spending cuts will be announced at the end of October.
U.K. financial assets have stabilized in recent days, helped both by the change in budget plans as well as Bank of England intervention to stabilize the bond market.
From a low of $1.0349, the pound
GBPUSD,
was at $1.1260 on Thursday afternoon. The yield on the 30-year gilt
TMBMKGB-30Y,
which had spiked as high as 5.17% during a pension fund crisis, was below 4%.
