British Finance Minister Kwasi Kwarteng has been fired after less than six weeks on the job
amid growing market chaos unleashed by a poorly timed tax cut plan.
The firing of the finance minister comes hours before British Prime Minister Liz Truss is
expected to announce that her government will abandon proposed tax cuts outlined in a
controversial mini-budget that was delivered on September 23.
The proposed tax cuts, which were unfunded, included a promise to reverse a hike on corporate
taxes to 25% from 19%, and a 1.25% cut to a dividend tax.
The tax cuts and other fiscal measures proposed by the Truss government unleashed market
chaos in recent weeks, leading to a steep drop in the price of the British currency and turmoil in
bond markets that required intervention by the Bank of England.
The British central bank had to intervene in recent days to save pension funds from total
collapse and prevent a further spike in mortgage rates for prospective homeowners.
Truss had been under pressure to rethink her economic policies, with opinion polls showing
support for her ruling Conservative Party collapsing and lawmakers within her own party plotting
to oust her after only five weeks in office.
Before today, Prime Minister Truss had remained defiant in the face of public criticism, accusing
her critics of being part of an “anti-growth coalition.”
Economists had questioned the timing of the tax cuts, coming as they do amid slowing
economic growth and rising interest rates.
Truss has scheduled a press conference for later today (October 14), where she is expected to
announce that her government is scrapping the proposed tax cuts.
