Liz Truss, Britain’s beleaguered prime minister, is struggling to keep her job this week when financial markets will weigh in on her abrupt economic reset and mutinous backbenchers aim to remove her.

Truss spent Sunday huddling with new Chancellor of the Exchequer Jeremy Hunt, her choice to restore stability following a humiliating retreat that included firing her first candidate for the job and abandoning an economic policy that prompted a sell-off in UK assets.

While the markets will put Truss to the test, her fate will eventually be decided by a Conservative Party determined to maintain her job.


According to a source close to the situation, Truss will host a Cabinet reception at 10 Downing Street on Monday evening to begin gathering input for a medium-term budget plan that Hunt will release on Oct. 31. According to the source, Hunt will also meet with all Conservative MPs this week to gather feedback.

Hunt spent the weekend outlining a fundamentally different economic policy – raising taxes while cutting spending – in order to avoid further severe increases in UK government borrowing costs. Gilts fell substantially on Friday afternoon as a result of Truss’s disappointing press conference, and the Bank of England’s emergency bond-buying plan, which was put in place to calm markets after Truss published her mini-budget, has now expired.

The pound rose in early Asian trading on Monday as investors anticipated that more of Truss’ planned tax cuts will be reversed. The FTSE 100 futures dropped 0.6% at the open but outperformed the Euro Stoxx 50 contracts.

If Truss survives the markets, her next issue will be coping with an openly revolting party. As of Sunday evening, three Conservative MPs had publicly called for her resignation, and several others had privately indicated that they would write to Graham Brady, the chairman of the backbench 1922 Committee, demanding that party rules be amended to allow a vote of confidence in Truss.


Plotting against Truss is picking more steam because the Conservatives are afraid of a record poll lead over Labour and the risk of an electoral disaster if she is allowed to stay in office. Supporters of Rishi Sunak, who finished second to Truss in the recent Tory leadership election, stepped up their efforts to gain support for his installation over the weekend.

Former top whip Julian Smith has contacted a number of Conservative MPs to test support for a Sunak coronation, avoiding a vote among the party’s grassroots members. Mel Stride, a vocal Truss opponent, and Sunak supporter will host a dinner for MPs on Monday evening, following up on a similar event last week.

According to Truss’ ally, the plotters are unconcerned about the UK’s economic development or the fate of the markets. The plotters, according to the source, will not be crowned and will instead trigger a nationwide election.

Truss’ position is protected by a one-year immunity clause under current Conservative principles. According to a source close to the party, nearly two-thirds of the party’s around 360 MPs would need to tell the 1922 executive to change the rules before it would do so, meaning that Truss’s departure is unlikely. The executive will not meet until Wednesday, according to the source.

According to a senior Conservative official who spoke on the condition of anonymity, Truss may survive for weeks or months with markets calmed, her policy platform reversed, and Hunt essentially in authority. This is the most likely outcome, according to the insider, because there is no unity candidate and enough MPs want to give the new Hunt operation a chance.

Truss spent Sunday at her official country estate with her chancellor debating the minutiae of the government’s medium-term financial policy, attempting to keep her premiership alive.

When asked if he will abandon more of Truss’ tax-cutting proposal, Hunt previously stated that nothing is “off the table,” emphasizing that he is now the government’s major voice on UK fiscal policy.

Hunt declined to rule out delaying the prime minister’s plan to lower the basic rate of income tax by a year in an interview with the BBC on Sunday, a move that would amount to another U-turn. A delay might save GBP 5 billion ($6 billion), according to the Sunday Times.

But it’s unclear whether Truss will make it until Halloween for the fiscal plan, leaving her fate in the hands of the financial markets and her backbenchers.

About Rishi Sunak

Rishi Sunak is a British politician who was the Chancellor of the Exchequer from February 13, 2020, to July 5, 2022, and the Chief Secretary to the Treasury from July 24, 2019, to February 13, 2020. Since 2015, he has served as the Conservative Party’s Member of Parliament for Richmond (Yorks).

He announced his candidacy to succeed Johnson as Conservative Party leader on July 8, 2022. Sunak finished first among Conservative MPs in a postal ballot of party members on July 20 and subsequently faced Liz Truss in a general election. Truss, who garnered 42.6% of the vote in the Conservative leadership contest, defeated him.

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