On Friday 23 September, the new chancellor, Kwasi Kwarteng, got to his feet in the House of Commons to deliver what he called a “fiscal event”. It was an attempt to present himself to the country and show the financial markets that with the arrival of himself and Liz Truss, Britain was under new management.
The result was spectacular: the pound crashed in value to a record low, Britain’s borrowing costs shot up and the bottom nearly fell out of the pension industry. The Bank of England was forced to step in with a rescue plan and even the IMF suggested a rethink was in order.
As Heather Stewart tells Hannah Moore, it was an unprecedented chain of events that was largely of the government’s own making. On Monday, however, came a screeching U-turn. Ahead of his speech to the Conservative party conference, Kwarteng made the round of morning broadcasts with “contrition”, if not an apology. He said he would cancel the scrapping of the top rate of tax. But has the damage to the economy and his own credibility already been done?
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