UK economic crisis: Finance minister Kwasi Kwarteng 'sacked' after tax cuts spark outrage

On September 23, Kwarteng had announced a new fiscal policy, delivering Truss's vision for vast tax cuts and deregulation to try to shock the economy out of years of stagnant growth.

In a recent development, British Prime Minister Liz Truss has reportedly fired her finance minister Kwasi Kwarteng on Friday, shortly before she was expected to scrap parts of his economic package in a bid to survive the market and political turmoil gripping the country.

Downing Street reportedly said that Truss, in power for just over a month, would hold a press conference later on Friday after Kwarteng was forced to rush back to London from IMF meetings in Washington to address the chaos.

If reports of Kwasi Kwarteng being sacked are confirmed, he would become Britain's shortest serving chancellor since 1970, and his successor would be the country's fourth finance minister in as many months.

On Friday, British government bonds rallied further, adding to their partial recovery since Truss's government started looking for ways to balance the books after her unfunded tax cuts crushed UK asset values and drew international censure.

On September 23, Kwarteng had announced a new fiscal policy, delivering Truss's vision for vast tax cuts and deregulation to try to shock the economy out of years of stagnant growth.

But the response from markets was so ferocious that the Bank of England had to intervene to prevent pension funds from being caught up in the chaos, as borrowing and mortgage costs surged.

The duo have since been under mounting pressure to reverse course, as polls showed support for their Conservative Party had collapsed, prompting colleagues to openly discuss whether they should be replaced.

Triggered by a market rout, Truss now runs the risk of bringing the government down if she cannot find a package of public spending cuts and tax rises that can appease investors and get through any parliamentary vote in the House of Commons.

The Conservative Party's discipline has all but broken down, fractured by infighting as it struggled first to agree a way to leave the European Union and then how to navigate the COVID-19 pandemic and grow the economy.