‘Trusonomics’ Collapses in 40 Days... UK Prime Minister Faces Calls to Resign

Sharp Decline in Pound Value Due to Large-Scale Tax Cut Policy Backfire
Ruling and Opposition United in Calling for Prime Minister Replacement... "Either Ousted or Resign"

UK Prime Minister Liz Truss, who proposed a tax cut policy as an election slogan, faced calls for resignation just 40 days after taking office as the policy plunged British society into chaos. Photo by AP Yonhap News

[Asia Economy Reporter Kim Sung-wook] UK Prime Minister Liz Truss faced calls to resign just 40 days after taking office. Her tax cut policy, which was a campaign slogan, plunged British society into chaos, leading to calls for her to take responsibility.

According to The Guardian and others on the 16th (local time), senior Conservative Party lawmakers in the UK plan to hold a meeting the next day to discuss measures to address Truss's mismanagement. Some in the British political sphere predict that the prime minister will be replaced following the meeting. A senior Conservative Party official told The Guardian, "Truss is basically at the departure gate now," adding, "The only question left is whether she will resist and be ousted or resign voluntarily."

The main opposition Labour Party is also expected to play the 'no-confidence in the cabinet' card. Labour leader Keir Starmer recently described the UK government's announcement and subsequent withdrawal of the tax cut policy as "weeks of bizarre chaos." He has also expressed the view that the 2024 general election should be brought forward. Both ruling and opposition parties are demanding accountability from the Truss government. The UK Financial Times commented, "Truss has become a zombie at a record speed."

This reaction is linked to the demise of 'Trussonomics.' On the 23rd of last month, Prime Minister Truss unveiled a large-scale tax cut plan worth ?43 billion (approximately 69 trillion KRW). The plan aimed to revive the UK economy but instead caused the pound sterling to plummet sharply in value.

The International Monetary Fund (IMF) criticized the UK's tax cut policy on the 27th of last month, stating, "It is inappropriate to introduce large-scale indiscriminate tax cuts during a period of inflation," and pointed out that "the central bank's monetary policy is tightening while the government's fiscal policy is expansionary, which is problematic."

As controversy continued, confusion grew within the Conservative Party. On the 14th, Truss dismissed Kwasi Kwarteng, the Chancellor of the Exchequer and her political ally. She also appointed Jeremy Hunt, who had supported her rival Rishi Sunak in the previous leadership contest, as the new Chancellor.

Although the change of Chancellor was a strategic move, it only intensified the turmoil. Chancellor Hunt acknowledged that "there were 'mistakes' in Prime Minister Truss's decisions," and stated, "Taxes will be partially increased, and government spending will be cut." He plans to completely overturn Truss's core economic policy, 'Trussonomics,' and announce a new budget on the 31st of this month.

According to The Times and others, a senior Conservative lawmaker said, "Truss can no longer dismiss Chancellor Hunt," adding, "Even if everything is changed, it cannot be stopped, and if not done, the market cannot be stabilized."

Meanwhile, US President Joe Biden expressed concerns about Truss's tax cut policy in an interview with Reuters on the 15th, saying, "I'm not the only one who thinks it was a mistake."

This content was produced with the assistance of AI translation services.