Sorry, you need to enable JavaScript to visit this website.

Kwasi Kwarteng shortest serving chancellor sacked, who is jeremy hunt

 
The UK's Finance Minister Kwasi Kwarteng was fired after plans to cut taxes and chaos on the stock market.

On Friday, British Prime Minister Theresa May fired Finance Minister Kwasi Kwarteng, who had been in the job for less than six weeks.

"Since we announced the Growth Plan on September 23, the economy has changed quickly. We responded to these events with the help of the Bank of England and some very good officials at the Treasury. I want to thank my officials for their hard work," Kwarteng wrote in his resignation letter after being asked to leave.

"As we move forward, it is important to stress that your government is committed to fiscal discipline. The Medium-Term Fiscal Plan is a key part of reaching this goal, and I'm looking forward to helping you and my successor do it from the backbenches."

Kwasi Kwarteng shortest serving chancellor sacked, who is jeremy hunt
The UK's chancellor of the exchequer, Kwasi Kwarteng, speaks at a side event on Tuesday, October 4, 2022, during the Conservative Party's annual autumn conference in Birmingham, UK.

Jeremy Hunt, who had been Health Secretary and Foreign Secretary before Kwarteng, was named as his replacement. Edward Argar also took over for Chris Philp as head of the Treasury.

On September 23, Prime Minister Liz Truss is rumored to say that the government will abandon key fiscal policy promises made in Kwarteng's controversial "mini-budget." These include a large number of tax cuts that can't be paid for.

Among the policies that could be cut are Kwarteng's promise to undo his predecessor Rishi Sunak's increase in corporation tax from 19% to 25%, which is expected to cost around £19 billion ($21.4 billion) by 2026, and a cut of 1.25% in dividend tax.

After getting a lot of pushback from the public, the government scrapped its plan to get rid of the top rate of income tax earlier this month. However, this didn't calm the market.

Kwarteng cut short his trip to Washington on Thursday so he could fly back to London. This was because government ministers were scrambling to fix the market chaos that has been going on for the past few weeks.

This included the selling of long-term government bonds, which forced the Bank of England to step in and save pension funds from going bankrupt, and a rise in mortgage rates for people who wanted to buy a home.

Truss was under a lot of pressure to change her economic policies because polls showed that support for the ruling Conservative Party was falling and lawmakers in her own party were reportedly planning to get rid of her after a rough first five weeks in office.

Even so, both she and Kwarteng have stayed firm in public over the past few days, calling those who disagree with the government's radical financial plans part of a "anti-growth coalition."

"I've said many times in the past few weeks that keeping things the same wasn't an option. Too long, this country has been held back by slow growth and high taxes. If this country is to succeed, that must change," Kwarteng wrote in his letter.

"We've worked together and been friends for a long time. During that time, I've seen how hard you work and how determined you are. I think the way you see things is the right way. It was a pleasure to be your first Chancellor."

The price of gilts, which are U.K. government bonds, went up sharply before Truss' news conference. During morning trade, the long-term 30-year yield briefly reached 4.261%. Prices move in the opposite way of yields.

Tags

Shariff share buttons