UK PM Liz Truss plans to replace her amid economic collapse | World news

British Prime Minister Liz Truss is fighting to save her prime ministership this week, when financial markets will take a fresh look at her disastrous economic restructuring while backbenchers plot to oust her. .

Only 40 days in office, Truss spent Sunday huddling with the new Chancellor of the Exchequer Jeremy Hunt, his choice to restore stability after a scandalous climb that involved sacking his initial choice for work and junking an economic plan that led to a sell- off in UK assets.

While the markets will test Truss, his fate ultimately rests with a conservative party that is struggling to save his job.

Truss will host a reception for the Council at 10 Downing Street on Monday evening to continue to get their input into the medium-term budget plan, which Hunt will announce in October. Hunt will also host meetings with all Conservative MPs this week to get their feedback, the official said.

Hunt spent the weekend outlining a very different fiscal approach – taxes would have to rise, spending would have to be cut – in a bid to avoid further punitive increases in UK government borrowing costs. Gilts sold off sharply on Friday afternoon after a lackluster press conference by Truss, and the Bank of England’s emergency-buying program, designed to calm markets after Truss unveiled his mini-budget, has now ended.

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The rate rose in early Asian trade on Monday as investors speculated that more of the Truss package of unfunded tax cuts could be reversed. FTSE 100 futures fell 0.5% at the open.

If Truss can weather the markets, his second test will be to deal with a group in open rebellion. On Sunday night, three Tory MPs were publicly calling for him to quit and several others said privately they would write to Graham Brady, chairman of the 1922 backbench, urging him to change the party constitution returned so that a vote of confidence can take place. in the truss.

The plot against Truss is accelerating because the Tories are spooked by the lack of support against Labor and the belief that they face a general election if he is allowed to stay in office. Supporters of Rishi Sunak, who came second to Truss in the recent Tory leadership race, staged efforts over the weekend to secure support for his installation.

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Julian Smith, a former chief whip, has been in touch with many conservative MPs to gauge support for the so-called coronation of Sunak, beyond another vote from party supporters. Mel Stride, a vocal critic of Truss and a Sunak supporter, is hosting a dinner for MPs on Monday evening, following a similar event last week.

Truss’ partner warned that the developers had no regard for the UK’s economic prosperity or the fate of the markets. The organizers will not be satisfied and will simply bring a general election, the person said.

Truss’ position is protected by a one-year immunity clause under current conservative laws. Almost two-thirds of the party’s 360 MPs need to tell the 1922 leader to change the rules before doing so, according to a person familiar with his decisions, meaning Truss’s dismissal has it is close to impossible. The president won’t meet until Thursday, the person said.

However, Truss could rest easy for weeks or months with markets calm, his policy platform changed and Hunt effectively under pressure, according to a senior Conservative operative who spoke on condition of anonymity. This is the most likely outcome, the person said, because there is no unified candidate and enough MPs are willing to give Hunt’s new job a chance.

Fighting to keep his presidency alive, Truss spent Sunday locked in talks with his prime minister at his official country residence about the contents of the government’s medium-term budget plan.

Earlier, Hunt said nothing was “off the table” when asked if he would reject more of Truss’s tax-cutting plan, confirming that he is now the government’s leading voice on UK fiscal policy. .

In a BBC interview on Sunday, Hunt refused to rule out delaying by a year the Prime Minister’s plan to cut the basic rate of income tax, a move that would amount to another U-turn. A delay could save £5 billion ($6 billion), according to a report in the Sunday Times.

But it’s still a live question about whether Truss even survives until Halloween for the financial plan, its fate at the hands of the financial markets and its returns.

Truss has “weakened Britain’s confidence as a reliable, responsible economic leader, and fractured our party in an irreversible way,” Tory MP Jamie Wallis said in his letter calling for his resignation. “You no longer have the confidence of the country or the parliamentary party.”