Mr Kwarteng, who studied the history of financial crises as a PhD student at the University of Cambridge, dismissed the failure in financial markets as a temporary phenomenon. Like Miss Truss, he is a believer in disruptive change. Together, they are one of the authors of “Britannia Unchained,” a manifesto for Thatcher-style free-market revolution in post-Brexit Britain. Among other things, the authors have described the British as “one of the worst idlers in the world.”
When, or even whether, will be able to fully recover from this period of political and economic uncertainty remains unclear. On Thursday, when news of Ms Truss’s resignation was announced, the pound rose against the dollar and yields on UK government bonds fell.
Almost all of the government’s tax cuts have been reversed and the next prime minister, regardless of his or her politics, will have no choice but to pursue spending cuts. and strict fiscal discipline. Some fear a return to Prime Minister David Cameron’s dismal austerity in the years following the 2008 financial crisis.
“Rishi or someone else can stabilize the ship and appease the market,” said Prof Portes, referring to Rishi Sunak, a former prime minister who has unsuccessfully fought against Ms Truss and may seek to succeed her. “But it’s hard to see how, given the state of the Conservative Party, any Tory prime minister could repair the more lasting damage.”
Much of that damage was to Britain’s once-reputation in the market. Economists have begun to refer to Britain in the same breath as financially stubborn countries like Italy and Greece. Lawrence H. Summers, former US Treasury Secretary, told Bloomberg News, “I’m sorry to say, but I think the UK is behaving a bit like an emerging market that is turning itself into a market. sank.”
It’s an amazing humour for a country that in 2009 announced a $1.1 trillion emergency fund to bail out the global economy.