Truss, Kwarteng grapple over sterling crisis response: Sources
3 Min Read
First signs that the UK Prime Minister and the Chancellor will live like fighting cocks emerged as the pound fell to a historic low shortly after the mini-budget.
-
Liz Truss and Kwasi Kwarteng during a visit to a modular housing factory in Northfleet (Reuters)
The first signs of disagreement between Liz Truss and Kwasi Kwarteng over how to deal with the falling pound have emerged to the surface, after the pair met in No 10 on Monday to discuss ways to respond.
Simultaneously, Downing Street denied that there was a schism between No 10 and No 11 over how to deal with the market reaction to the mini-budget.
However, Whitehall sources reportedly said there was talk within the civil service of a dispute between the Prime Minister and Chancellor during the meeting on Monday morning.
Meanwhile, Sky News reported that Truss had been resisting Kwarteng's proposal that a Treasury statement was needed to ease the markets.
A Downing Street source stressed it was "nonsense" that Nos. 10 and 11 were at odds during the meeting, adding that Truss meets Kwarteng every day and there was no argument.
However, another government source contradicted that, admitting that there was friction during the encounter.
Conservative MPs are still enraged about the budget, which has caused the pound to fall to a record low against the dollar at times since Friday.
At least one Tory MP is thought to have already submitted a letter to the 1922 Committee expressing dissatisfaction with Truss, with talk among backbenchers of trying to oust her if she does not change her economic course.
Tory whips were calling MPs on Tuesday to reassure them that they would vote for the upcoming finance bill, and Kwarteng held a call with backbenchers to explain his plans in greater detail.
To reassure investors, the Treasury issued a statement late Monday afternoon stating that it would commission a forecast from the Office for Budget Responsibility and hold another fiscal event in mid-November.
It is worth noting that both Nos. 10 and 11 devised the mini-budget on Friday, which included £45 billion in tax cuts, but the market reaction has been harsh, with the pound hitting a new historical low and gilt yields - the cost of government borrowing - mounting.
Hundreds of mortgage deals have already been withdrawn this week as lenders skirmish to price their products due to financial market volatility.
