LONDON — British Prime Minister Liz Truss insisted Wednesday she was a “fighter not a quitter” as she was grilled by parliamentarians for the primary time since being forced to scrap just about all of her flagship fiscal policies.
Truss said she had “acted within the national interest to be sure that that we have now economic stability,” while also starting the session by saying she was “sorry” and had “made mistakes.”
The row-back of her huge program of tax cuts, originally announced on Sept. 23, got here after it sparked massive volatility in financial markets, with the pound plunging against the dollar and U.K. government bonds being sold off at such a rapid rate it threatened to topple pension funds. Mortgage deals were also pulled as rate of interest hike expectations rose rapidly.
Full details of the federal government’s recent economic policies are expected Oct. 31, together with an independent economic forecast.
Attack lines from opposition leader Keir Starmer during Prime Minister’s Questions on Wednesday included questions over how the general public could trust a frontrunner whose “guarantees didn’t last per week”; branding her policies “fantasy economics”; and accusing Truss of crashing the economy.
“I needed to take the choice due to the economic situation to regulate our policies,” Truss said. She added that rates of interest were rising globally and economic forecasts had worsened.
Analysts told CNBC bond markets were being influenced by a spread of things and will get better, however the U.K. had suffered long-term damage to its economic credibility.
Pressure to resign
The turbulence during the last month has left Truss under intense pressure to resign lower than two months into her tenure, even from members of her own party.
Speculation currently abounds over her future, including whether she could step down — with the Conservative Party plunging in opinion polls and a recent YouGov survey putting Truss’ popularity at just 10% — or be forced out.
Under current party rules, the Conservatives aren’t in a position to oust Truss and hold one other leadership election for a 12 months. Truss went head-to-head against former Finance Minister Rishi Sunak for 2 months over the summer after ex-PM Boris Johnson resigned in July.
Nevertheless, the party could agree on a alternative if she were to step down, or it could look to change current rules.
Each options would likely prove divisive, with the party also split on the most effective successor. Contenders are thought to incorporate recent Finance Minister Jeremy Hunt; Sunak; Leader of the Commons Penny Mordaunt, who stood in for Truss earlier this week; and even a return of Johnson.
It can also leave the party facing further pressure to carry a general election to supply it with a public mandate. The last vote was held on Dec. 12 2019, when Johnson led the Conservatives to a landslide majority.
Meanwhile, a vote called by the opposition Labour Party to be held later Wednesday on reinstating the U.K.’s ban on fracking was described in a leaked Conservative Party email, published by Sky News, as a “confidence motion in the federal government.”
Many Conservative MPs oppose fracking, which was only re-permitted last month.