UK's Liz Truss abandons tax cuts, axes finance chief
The new British prime minister is scrambling to calm markets and her own political party
U.K. Prime Minister Liz Truss fired her Treasury chief and reversed course on a significant part of her economic plan on Friday to bring calm after weeks of political and financial turmoil in the nation.
Truss, who has been in office only six weeks, announced in a press conference that she had scrapped roughly 20 billion pounds worth of tax cuts proposed by the government last month, saying she was acting to "reassure the markets of our fiscal discipline."
Britain's Prime Minister Liz Truss attends a press conference in the Downing Street Briefing Room in central London on October 14, 2022, following the sacking of the finance minister in response to a budget that had sparked markets chaos. (Photo by DANIEL LEAL/POOL/AFP via Getty Images / Getty Images)
The move is the new British leader's second U-turn on tax cuts in as many weeks, after she introduced and then abandoned a controversial income tax cut for top earners as part of her budget plan.
GREENPEACE PROTESTERS DISRUPT UK PRIME MINISTER LIZ TRUSS SPEECH WITH ‘WHO VOTED FOR THIS?’ SIGN
Prior to Friday's presser, Truss axed her close friend and finance minister, Kwasi Kwarteng, replacing him with longtime Conservative lawmaker Jeremy Hunt, who will be the U.K.'s fourth Treasury chief in as many months.
Britain's Prime Minister Liz Truss, left, and Chancellor of the Exchequer Kwasi Kwarteng walk during a visit to a construction site in Birmingham, England, Tuesday, Oct. 4, 2022. (Stefan Rousseau/Pool Photo via AP / AP Newsroom)
Last month, Kwarteng presented a plan including 45 billion pounds in tax cuts to be paid for by government borrowing, triggering concerns that it would add to the debt and worsen inflation in the U.K., which sits near a 40-year high at 9.9%.
UK PM LIZ TRUSS ALREADY ENGULFED IN TURMOIL AMID ECONOMIC STORM, PLUNGING POLL NUMBERS
The proposal rattled investors and sent the pound to its lowest-ever rate against the dollar, rocking markets so severely that the Bank of England stepped in to buy 70 billion pounds in bonds to stabilize the currency.
New British Prime Minister Liz Truss arrives to make an address outside Downing Street in London Tuesday, Sept. 6, 2022, after returning from Balmoral in Scotland, where she was formally appointed by Britain's Queen Elizabeth II. (AP Photo/Kirsty Wigglesworth / AP Newsroom)
Truss rose to Conservative Party leadership on the promise of slashing taxes and regulations but is now facing backlash, even from some within her own party.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
She dodged repeated questions Friday on why she should remain in office when she and Kwarteng were both responsible for the economic plan and the turmoil it sparked.
FOX Business' Ruth Marks Eglash, the Associated Press and Reuters contributed to this report.