UK Chancellor of the Exchequer (Finance Minister) Kwasi Kwarteng has been fired after just 38 days on the job on Friday as Prime Minister Liz Truss waters down her proposals to cut taxes aggressively, according to both the Times and the BBC.
Truss is expected to make a statement Friday afternoon announcing that she’s making a U-turn on her government’s tax-slashing proposals.
Kwarteng’s pledges to carry on cutting income and corporation tax have rattled markets in recent weeks, with yields on gilts – UK government bonds – soaring.
10-year gilt yields fell 23 basis points to 3.962 percent Friday as investors waited for Truss’s statement.
The British pound slumped 1.18 percent against the dollar to trade at $1.1197 at last check, having rallied Thursday as markets started anticipating a policy U-turn. The pound is down more than 17 percent against the dollar since the start of the year.
‘Kwarteng’s removal as chancellor, making him one of the shortest holders of that office, hasn’t done much to boost the pound, given that it has already rallied yesterday on hopes of a u-turn on the budget,’ IG Group’s chief market analyst Chris Beauchamp told the Times, ‘Now the market will wait to see what is actually decided, and only then will it take a view on giving the government some support in terms of another bounce in the pound or a drop in gilt yields.’
‘Liz Truss certainly isn’t out of the woods yet,’ he added.
Kwasi Kwarteng became the first Black British to be appointed as Chancellor (Finance Minister) in the government of the new Conservative Prime Minister, Liz Truss in September.
Kwarteng, whose parents came to the UK from Ghana as students in the 1960s, had become the first black Conservative Secretary of State – a Cabinet position – when he was put in charge of the Department of Business, Energy and Industrial Strategy in January this year, .
He had been serving as Minister of State in the same ministry.
Kwarteng, 47, who was born in North East London, was previously Parliamentary Under Secretary of State in the Department for Exiting the European Union from November 2018 to July 2019.
