Liz Truss sacks Chancellor Kwasi Kwarteng
He's been replaced by Jeremy Hunt
Last updated 14th Oct 2022
Chancellor Kwasi Kwarteng has been sacked by Prime Minister Liz Truss. He confirmed the news in a tweet saying 'You have asked me to stand aside as your Chancellor, I have accepted.'
Mr Kwarteng flew back to London on Friday for the talks after cutting short a visit to the International Monetary Fund’s annual meeting in Washington.
The sacking is ahead of a press conference from Liz Truss later today in which it's thought there will be a U-turn on some of the Chancellor's mini-budget announcements.
It follows days of turmoil in the markets amid concerns about the impact of his ÂŁ43 billion tax giveaway on the public finances.
Kwarteng had already backed down on one of the announcements in his mini-budget and abandoned a plan to abolish the top rate of income tax.
Jeremy Hunt becomes Chancellor
Liz Truss has appointed former foreign secretary Jeremy Hunt as the new Chancellor of the Exchequer after she dramatically sacked Kwasi Kwarteng.
The choice of Mr Hunt, a prominent backer of her rival Rishi Sunak in the Tory leadership contest, will be seen as an attempt to restore stability after weeks of turmoil in the wake of Mr Kwarteng’s mini-budget.
Letter to Liz Truss
In a letter to the Prime Minister, Kwasi Kwarteng posted on his Twitter account, Mr Kwarteng said he will support his successor but insisting “following the status quo was simply not an option”.
“As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation — that must still change if this country is to succeed.”
Lib Dems call for election
Liberal Democrat leader Sir Ed Davey has already called for a general election in response to Kwasi Kwarteng being sacked as Chancellor.
He said: “This mustn’t just be the end of Kwarteng’s disastrous chancellorship, it should be the death knell of the Conservatives’ reckless mismanagement of our economy. It didn’t suddenly start with Kwarteng but it must end now.
“People are angry, fed up and worried about the future. Most of all they are furious that Conservative MPs seem to think this is an acceptable way to conduct the government of our country in these difficult times.
“Enough is enough. It started with Boris Johnson failing our country, and now Liz Truss has broken our economy, it is time for the people to have their say in a general election.”
Cost of Living crisis
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to ÂŁ3,549 for an average home in October but a price freeze from the government restricted the typical bill to ÂŁ2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits ÂŁ100
On 9th June 2022, the average cost of filling up a car with petrol hit ÂŁ100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.