© Reuters. British Prime Minister Liz Truss attends a news conference in London, Britain, October 14, 2022. Daniel Leal/Pool via REUTERS
LONDON (Reuters) – Liz Truss on Thursday said she would resign as British prime minister, brought down just six weeks into the job by an economic programme that roiled financial markets, pushed up living costs for voters and enraged much of her own party.
Following are latest events, comments and context:
POLITICS
* A leadership election will be completed within the next week to replace Truss, the shortest serving prime minister in British history. The first results in the contest will be announced at 1700 GMT on Monday, the Conservative party said.
* French President Emmanuel Macron and Irish Prime Minister Micheal Martin voiced hope on Thursday that the next British leader would bring stability to the country after Truss resigned.
* The United States and Britain are enduring allies and their strong bond will last, U.S. President Joe Biden said on Thursday after Truss announced her resignation.
* Former British Prime Minister Boris Johnson is flying back to the UK this weekend, a journalist at the Daily Telegraph newspaper reported on Thursday. The Times newspaper had reported that Johnson was expected to stand in the race to replace Truss.
* Former finance minister Rishi Sunak is “certain to stand” in the contest to succeed Prime Minister Liz Truss, a reporter at the Telegraph newspaper said on Thursday citing sources.
* Residents in a traditional Conservative Party-voting area of Britain hailed Truss’ resignation, with one saying the state of the country was “an absolute disgrace” following her six weeks in office.
* Daniel Pryor, who lobbies for governments to shrink the state and cut taxes, feels Truss’s brief, disastrous spell as prime minister has killed off his dream of a low-tax, deregulated British economy for at least a generation.
MARKETS
* Britain’s main stock indexes closed higher after Truss resigned, bringing a measure of relief to investors after her ill-fated tax plans unleashed turmoil in financial markets.
* British government bond prices rose although their gains were tempered by the prospect of another week of political upheaval as the Conservative Party chooses Truss’s successor.
* European shares rose after the resignation.
WHAT’S BEHIND THE CRISIS?
* The Bank of England was forced into emergency bond-buying to stem a sharp sell-off in Britain’s 2.1 trillion pound ($2.3 trillion) government bond market that threatened to wreak havoc in the pension industry and increase recession risks.
* The sell-off began after then-new finance minister Kwasi Kwarteng’s tax-cut announcement on Sept. 23.
* His replacement Jeremy Hunt on Monday scrapped “nearly all” of Truss and Kwarteng’s economic plan and scaled back her vast energy support scheme, announced in September, in a historic U-turn to try restore investor confidence.
* The BoE interventions have highlighted a growing segment of Britain’s pensions sector – liability-driven investment.
