The announcement of former British Prime Minister Liz Truss’ ‘mini’ budget after nearly three weeks in office marked the end of her political honeymoon.
The collapse of Truss’s economic project, dubbed “Trussonomics,” would seal her fate and deal a lasting blow to the conservative party’s reputation for fiscal responsibility. Her ideological ‘mini’ budget included £45 billion in unfunded tax cuts – the largest tax cuts in 50 years.
The reaction of the markets was rapid. The value of the pound fell as government borrowing costs rose, threatening the solvency of parts of the pension sector. The Bank of England launched an emergency government bond-buying program in an attempt to stabilize markets.
In the weeks that followed, Truss would fire her chancellor and reverse most of her proposed tax cuts. These extraordinary events culminated in her resigning from office after just 44 days – the shortest premiership in British history.
Crucially, Kwarteng decided to forgo the independent projections from the Office for Budget Responsibility that are common prior to tax statements.
Three days later, new Chancellor Jeremy Hunt tore up nearly all of the remaining tax cuts in a breach of protocol, which was communicated in a statement before London’s markets opened.
Data and images by Steve Bernard