British policy is mired in chaos for this past week, but Prime Minister Theresa May seems to be capable of holding on to just one thread. Her political leadership suffered an enormous hit when she was forced to fire her chancellor of the government’s exchequer, Kwasi Kwarteng, in an effort to end the ongoing economic and political crisis. William Hague, a former Conservative chief, recently stated that Trussher leadership is hanging from a twig’. It’s easy to comprehend why. To placate market participants who were experiencing turmoil for more than about three weeks, Truss has canceled a portion of her controversial economic policy and fired Kwasi Kwarteng.
1. What caused the financial and political turmoil that led to the dismissal of Kwasi Kwarteng?
The United Kingdom experienced an economic crisis and political crisis during the last few years. The result was Kwasi Kwarteng’s firing. The crisis is the result of many factors including the global financial crisis in 2008, the Brexit referendum in 2016, and subsequent talks to join and the European Union. This has led to lower optimism about the economy of Britain and the rise in the rate of unemployment and inflation. The UK government has responded to the current crisis by making a number of hard decisions, like the increase in taxes as well as cutting expenditure. This has led to an increase in the number of people living in poverty and the decline of standard of living.
2. Did Kwarteng’s resignation and the decision to end the economic package a success?
The dismissal of Kwarteng as well as the breaking up of the economic package were designed to signal to the UK that the UK government was serious about making tough choices in the face of the economic uncertainties. We hoped that with these steps, it would encourage businesses and customers to invest and spend and increase the size of the economy.
Quick Summary
In conclusion, it is evident it is evident that Jeremy Hunt is prepared to have to make difficult choices in order to turn around the Truss administration in a positive direction. He has already signaled the reversal of his predecessor’s tax cuts, and it is likely to see more adjustments forthcoming. The only thing to know is the extent to which this could suffice to save the Truss administration, but it is certainly already a positive step in the right direction.
