Liz Truss will face the media at a news conference at 2:30 p.m. (9:30 a.m. ET), Downing Street has confirmed, after she fired Kwasi Kwarteng as her Chancellor.
Former Bank of England Deputy Governor Charlie Bean said the firing of finance minister Kwasi Kwarteng was “probably a necessary step, but it’s not sufficient.”
“This is important [given] the politics, but it doesn’t solve the economic question,” Bean told CNN.
Prime Minister Liz Truss must now unveil a new economic package that credibly includes a plan to tackle government debt over the next three to five years, he continued.
Otherwise, the British pound and UK government bonds could experience another selloff. “What the markets want to see is a coherent picture, how it all fits together,” Bean said.
“In the absence of that, you’re going to see sterling and gilts coming under pressure again.” The pound and bonds have regained ground in recent days in anticipation of a government U-turn.
So this places the blame on the messenger and allows the potential of the government to make a policy U-turn, but they have painted themself into a corner and it would mean capitulation of their entire financial policy.
Things might get messier before they get clearer and it is likely that more heads will roll. This is the sort of crisis which causes governments to all and this one has held the reins for such a short time that the moving vans are probably still unloading at No. 10 Downing Street.
Jeff