Hunt and the Markets Take Truss on a Welcome U-Turn
The incoming Chancellor of the Exchequer has acted decisively to change course. But his new direction leaves the prime minister without a policy compass.
Jeremy Hunt, UK Chancellor of the Exchequer and damage controller.
Photographer: Carlos Jasso/BloombergReality has undone Trussonomics in a few short weeks. Incoming Chancellor of the Exchequer Jeremy Hunt has wasted no time putting his predecessor Kwasi Kwarteng’s tax cuts to the sword. While it’s never a good look for your economic policies to be dictated by swings in the financial markets, a full 180-degree switch was required to draw a line under the crisis that sent UK government borrowing costs into orbit. Prime Minister Liz Truss’s authority, though, is in tatters.
The new chancellor is the grown-up in the room. “The most important objective for our country right now is stability,” Hunt said when announcing his bonfire of the tax cuts on Monday. “Governments cannot eliminate volatility in markets, but they can play their part." Hunt has met already with Bank of England Governor Andrew Bailey and, tellingly, with the head of the UK Treasury's debt management office. He knows where the priorities lie. Whether it will be enough, time will tell, but certainly this is the comprehensive U-turn the markets and global institutions such as the International Monetary Fund, and the credit-rating agencies have been calling for.