Britain's Prime Minister Liz Truss holds a press conference in the Downing Street Briefing Room, following the sacking of the finance minister in response to a budget that sparked markets chaos. Photo: AFP/Daniel Leal
By Joshua Nevett, BBC Politics
UK finance minister Kwasi Kwarteng has been sacked and the country's prime minister has announced another U-turn on tax-cut plans, in an effort to reassure financial markets.
UK Prime Minister Liz Truss described sacking her chancellor and scrapping a major economic policy after just 39 days as prime minister as "difficult".
In a brief statement after a day of turmoil, she reversed planned cuts to business tax aimed at boosting growth.
She admitted "parts of our mini-budget went further and faster" than the markets were expecting.
But she insisted she would stay on as PM to see through her "mission" to get the economy growing.
"I'm absolutely determined to see through what I promised - to deliver a higher growth, more prosperous United Kingdom to see us though the storm we face," Truss said.
The eight-minute news conference came after a dramatic day in which the prime minister fired Kwarteng as chancellor after he returned early from a US summit.
Some Tory MPs called for the prime minister to resign following the news conference, which one senior backbencher branded "a mega disaster".
The Liberal Democrats and the Scottish National Party called for a general election, while shadow chancellor Rachel Reeves said a new government led by Labour is "what this country needs".
But Truss has ruled out a general election until 2024, and with the government's large majority in parliament the opposition would find it very difficult to trigger one.
The prime minister has appointed former Health Secretary Jeremy Hunt - who backed Rishi Sunak in the Tory leadership contest - as the new chancellor.
Truss said her new chancellor shared her vision for the country and would deliver a statement on her economic plan at the end of this month.
Admitting "we need to act now to reassure the markets", Truss struck a solemn tone as she reversed a key policy to scrap the planned rise in corporation tax from 19 percent to 25 percent.
She said the move should raise £18bn a year in tax revenue for the government and act as a "down payment" on her economic plan.
"I want to be honest, this is difficult," Truss said. "But we will get through this storm."
Following her statement, Truss took questions from four journalists, all of whom asked her why she had not left office along with Kwarteng.
She said she was "determined to see through what I've promised" before leaving abruptly, shocking some journalists who did not get a chance to ask questions.
The statement marks the second major U-turn on the mini-budget after Truss cancelled her plan to scrap the top rate of income tax earlier this month.
In office for 39 days, Truss won the Conservative Party leadership last month after promising to slash taxes and deregulate the economy in a bid to "get Britain moving".
On 23 September, Kwarteng unveiled a so-called mini-budget to deliver the prime minister's vision, announcing the biggest package of tax cuts in decades.
But the mini-budget spooked financial markets and sparked a revolt among Tory MPs, who urged the prime minister to drop parts of her economic plan to shore up the UK's finances.
Truss's statement has intensified speculation about her future, with some Tory MPs sharing their thoughts with the BBC. "She will have to resign," one senior backbencher said, adding "she is worse than Corbyn", referring to the former Labour leader.
A former cabinet minister said "we cannot go on like this indefinitely", adding the "electorate are not going to forgive us" if Tory MPs oust another prime minister.
One of her supporters said "that was the worst press conference I have seen in a decade and a half".
Another MP, who voted for Truss in the leadership election, said "I had my hands over my eyes" during the speech.
One Scottish Tory MP said the statement made former PM Theresa May's "worst speech look like the Gettysburg Address", referring to a famous speech delivered by President Abraham Lincoln.
There had been muted reaction among Truss's supporters so far.
But members of Truss's cabinet tweeted support for her and the new chancellor, Hunt.
Former chancellor Nadhim Zahawi tweeted: "It's time to get Britain moving. We are determined to grow the economy, eliminate the Covid backlog and protect people from Putin's energy warfare."
In a tweet, Deputy Prime Minister Therese Coffey - a close ally of Truss - said the PM was "right to act now to ensure our country's economic stability".
Commenting on Hunt's appointment, the Levelling Up Secretary Simon Clarke said the new chancellor was "hugely capable and experienced".
On a day of fast-moving political developments:
- Kwarteng cut short a visit to the US to hold talks with the prime minister in Downing Street
- By early Friday afternoon, Kwarteng had been sacked as chancellor amid intense speculation of a U-turn
- In a letter to the PM, Kwarteng said Truss's economic vision was "right" for the country
- Responding, Truss said she was "deeply sorry" to lose him and thanked him for putting "the national interest first" by standing down
- Government borrowing costs rose and the pound's value fell after the PM's latest U-turn
- Some economists warned that the latest developments might not be enough to restore the UK's credibility
- Scotland's First Minister Nicola Sturgeon called for a general election, saying Truss was "unfit to hold the office of prime minister"
-BBC