Yields on government bonds soared during Truss’s premiership, while the pound plummeted towards parity with the dollar.
The markets have spoken – and Liz Truss has resigned.
Truss quit as UK prime minister after just 45 days in the role Thursday, becoming the shortest-serving leader in the country’s history.
Her premiership plunged British markets into turmoil, with soaring bond yields fuelling a potential pension fund crisis and the pound plummeting to an all-time low against the US dollar.
These three charts show the market chaos of the past 45 days:
Truss and her finance minister Kwasi Kwarteng rattled markets when they unveiled a mini-budget on September 23.
The government pledged to implement the UK’s most aggressive tax cuts in nearly 50 years, scrapping the top rate of income tax and slashing basic rates by 1%.
But Truss‘ $48 billion tax-cutting plan spooked economists, who warned it would undermine the Bank of England’s efforts to tame inflation and force it to hike interest rates even higher.
„Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,“ economists at the International Monetary Fund warned.
