Name Price24H (%)
Bitcoin (BTC)
$16,994.96
-0.80%
Ethereum (ETH)
$1,277.51
-0.50%
XRP (XRP)
$0.391615
-2.53%
Litecoin (LTC)
$76.71
-0.11%
Featured, Finance, News

Liz Truss: The President Who Resigned on Her 45th Day. What Happens Now!

On September 6th, Queen Elizabeth II formally appointed Truss as the Prime Minister. However, only within six weeks of her presidency, she resigned on Thursday after a disastrous and rapid fall of the new economic plan, which plunged the pound and caused a rebellion within her own party. Liz Truss will be remembered as one of the most disastrous and short-serving prime ministers in the history of Britain. While Truss’s victory over Rishi Sunak was celebrated by the conservative party last month, today the same people forced her to resign. 

Liz Truss always mentioned how she was a “fighter” but took a disparate step on Thursday asserting, “she recognized that in the current situation she could not deliver the mandate for which the conservative party elected her. She also states that her resignation as the leader of the conservative party is informed to his majesty, The King.” Before delving into what changes Britain’s market will undergo now that Truss has resigned, it is essential to understand what triggered the sudden abdication. 

Also Read: Research Shows Millions of Americans Opened New Crypto Broker Accounts, Are You Missing Out?

Why Liz Truss Resigned Her Post Only Within Six Weeks?

One of the major mistakes that Liz made was the “$50 Billion” package of tax cuts she prepared with Kwasi Kwarteng that she unveiled without conducting proper research and analysis. Such a step was taken in the middle of the most powerful inflation over the decades. Here’s what happened after the announcement of the huge tax cut package.

  • The Bank of England was compelled to buy emergency bonds to prevent the sharp sell-off of the 2.1 trillion pound bond market of Britain’s government which was a threat to destroy the pension industry and increase the risks of a recession in the country.
  • The sell-off started right after the tax cut announcement made on September 23rd by Kwasi Kwarteng. Right after firing Kwarteng, Truss announced that there will be a 25% rise in corporation tax as planned by Boris Johnson (immediate past prime minister). She reversed her previous plan of implying a 19% tax.
  • To restore investor confidence, the replacement of Kwarteng, Hunt scrapped all the economic plans prepared by Truss and Kwarteng and scaled her huge energy support scheme that leads announced in September.
  • The intervention of the Bank of England has put light on the increasing pension sector in the country. The Liability-Driven Investment (LDI) helps with the pension funds’ utilization to match liabilities to prevent risks of payment shortfalls. However, the increasing interest rates have accelerated collateral calls for those funds to cover the products.

The last straw was pulled when Truss tried to shut out her angry ministers into the ballot lobbies in the House of Commons for win-or-lose voting without any purpose. Although Truss won the ballot, the consequence resulted in losing her powerful position.

Also Read: The Results Of SWIFT’s CBDC Experiments Are Out, And They Are Astonishing

What Happens to the Financial Market after Truss’s Resignation?

Only after 44days as the Prime Minister of Britain, Liz Truss resigns her post creating chaos in the financial market. The question is, what happens to the market now? Here’s what the experts suggest. 

According to the Chief market analyst of Henyep Capital Markets Limited, Giles Coghlan says that the open revolt of the conservative party has sealed Truss’s fate. While she entered the time of “trickle-down economics”, her poorly timed pro-growth policy forced the UK bond market into a sharp sell-off as the new policies only fueled the flames of growing inflation. With the intervention of the BoE, the central bank is most likely to quickly increase the interest rates. In such a scenario, the departure of Truss is to be slightly GBP positive and might be a good sign for the stability of the pound

CEO and Chief Investment Officer of BRI Wealth Management, Dan Boardman-Weston shares his views stating that Liz Truss’s resignation puts an end to the chaotic 44days of government. The financial market and the country of Britain require stability, confidence, and certainty in times of uncertainty. While the next prime minister is still unclear, the Gilts, Equity markets, and Sterlings have all fallen. Weston is positive that once the position is filled, the economic conditions will be stable again

The Senior Investment and Market Analyst of Hargreaves Lansdown, Susannah Streeter states that “Truss’s career went up in flames, followed by her policies”. The gamble she played has backfired and taken down UK’s economy along with it. It will take time for the risks attached to the economy to fade away causing a nervous breakdown followed by the mini-budget. According to Streeter, the resignation of Truss has been positive as per the investors. The politically unstable market of the UK will take time to settle

In Conclusion

Although the financial experts are positive about the resignation of Liz Truss, there are some questions that are still unclear. With several turns on the triple-lock pension, will the government approve of it? In such an inconsistent state, how will the public figure out their future in finance? Britain is only left with the hope that the replacement of Truss will bring certainty, clarity, and calmness that will help the public to plan their future efficiently.

Leave a Comment

Your email address will not be published. Required fields are marked *

Explore The Blockchain World With Us,

Get Blockchain Enterprise Solution From HashCash