Kwarteng to Truss: You have asked me to stand aside as your Chancellor. I have accepted

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Britain’s Finance Minister Kwasi Kwarteng said on Friday that he had resigned after Prime Minister Liz Truss asked him to stand aside.

“You have asked me to stand aside as your Chancellor. I have accepted,” Kwarteng said in his resignation letter to Truss, which he published on Twitter.

Downing Street confirmed that Truss, in power for only 37 days, would hold a press conference later on Friday after Kwarteng was forced to rush back to London from IMF meetings in Washington.

British government bonds rallied further, adding to their partial recovery since Truss’s government started looking for ways to balance the books after her unfunded tax cuts crushed UK asset values and drew international censure.

Kwarteng had announced a new fiscal policy on September 23, delivering Truss’s vision for vast tax cuts and deregulation to try to shock the economy out of years of stagnant growth.

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But the response from markets was so ferocious that the Bank of England had to intervene to prevent pension funds from being caught up in the chaos, as borrowing and mortgage costs surged.

The duo have since been under mounting pressure to reverse course, as polls showed support for their Conservative Party had collapsed, prompting colleagues to openly discuss whether they should be replaced.

Having triggered a market rout, Truss now runs the risk of bringing the government down if she cannot find a package of public spending cuts and tax rises that can appease investors and get through any parliamentary vote in the House of Commons.

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