Liz Truss has announced that she will resign as Prime Minister of the United Kingdom. With this resignation, Liz Truss becomes the shortest serving Prime Minister in the history of the United Kingdom. She resigned because members of the Conservative party have lost confidence in her ability to manage the British economy.
Why did Liz Truss resign as British Prime Minister?
Since the beginning of her tenure as Prime Minister of the United Kingdom, Liz Truss’ administration has been plagued by controversy. However, the worst was when the British economy collapsed because of her mini-budget. The budget included unfunded tax cuts. The British pound collapsed as market participants began to lose confidence in the stability of the currency. Several pension funds were put at risk by the volatility of the market.
Kwasi Kwarteng, the finance minister under Truss, was removed from office. However, conservative MPs had no confidence in Truss’s ability to steer the ship during this difficult economic period. Rising inflation levels and the growing threat of recession did not help matters. The new finance minister, Jeremy Hunt, has reversed most of the provisions of the Truss budget. However, according to MPs, the Truss administration could not be saved.
Recently, Conservative whips asked MPs to consider a vote on fracking as a confidence motion. However, a junior minister later revealed that it was a clerical error and that the vote was not in fact a motion of confidence. This incident angered several MPs and Conservative Party officials. After this incident, Liz Truss resigned as Prime Minister of the United Kingdom.
How will the market react?
The stock market is expected to show a lot of volatility due to Truss’ resignation. The market will now see what the next move of the Tory party will be. The Labour Party is already calling for a general election, which some members of the Conservative Party have supported. The British market will react strongly to the continuation of the crisis.
The crypto-currency market also has a strong correlation with the general stock market. Therefore, any volatility in the UK market will also be reflected in the crypto-currency market.