With even US President Joe Biden joining in attacks on her economic agenda, Truss admitted it had been a “wrench” to fire her friend Kwasi Kwarteng as chancellor of the exchequer.
But writing in the Sun on Sunday newspaper, she said: “We cannot pave the way to a low-tax, high-growth economy without maintaining the confidence of the markets in our commitment to sound money.”
That confidence was jeopardised on September 23 when Kwarteng and Truss unveiled a right-wing programme, inspired by 1980s US president Ronald Reagan, of £45 billion ($50 billion) in tax cuts financed exclusively by higher debt.
Markets tanked in response, driving up borrowing costs for millions of Britons, and the Conservatives’ poll ratings have similarly slumped, leading to open warfare in the governing party mere weeks after Truss succeeded Boris Johnson.
She fired Kwarteng on Friday, despite co-authoring the package. His replacement Jeremy Hunt is now dismantling the tax cuts, while pressing for spending restraint by his cabinet colleagues even as Britons endure a cost-of-living crisis.
New FM Vows to win back market trust
The new chancellor met Truss at the prime minister’s country retreat on Sunday to thrash out a new budget plan which he is due to deliver on October 31.
Hunt promised to win back Britain’s economic credibility by accounting for every penny of the government’s tax and spending plans, while insisting that his boss Prime Minister Liz Truss remained in overall charge.
“No government can control the markets. No Chancellor should seek to do that,” Hunt told BBC television in an interview broadcast on Sunday. “There is one thing we can do and that’s what I’m going to do, which is to show the markets, the world, indeed people watching at home, that we can properly account for every penny of our tax and spending plans.”
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