UK’s Liz Truss defends economic plan that shocked markets

UK prime minister makes first public comments since her government’s mini-budget roiled markets, drove pound to record lows

Truss spoke a day after the Bank of England took emergency action to head off a crisis in the broader economy

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Britain’s Prime Minister Liz Truss. File photo: Reuters

Published: 3:58pm, 29 Sep 2022Updated: 4:46pm, 29 Sep 2022

British Prime Minister Liz Truss broke her silence on Thursday following nearly a week of chaos in financial markets triggered by her plans for tax cuts, saying she was willing to take “controversial” decisions to reignite growth.

A day after the Bank of England revived its bond-buying programme in an emergency move to protect pension funds from a potential partial collapse, Truss blamed the upheaval on Russia’s invasion of Ukraine which has caused inflation to spike around the world.

“We had to take urgent action to get our economy growing, get Britain moving, and also deal with inflation, and of course, that means taking controversial and difficult decisions,” she said in a series of interviews with local BBC radio stations.

“But I’m prepared to do that as prime minister because what’s important to me is that we get our economy moving.”

Truss became prime minister on September 6 after winning the leadership of the governing Conservative Party with promises to cut taxes.

British government bond yields, which surged after her finance minister Kwasi Kwarteng laid out their financial plan on Friday, rose again in early trade on Thursday, reversing some of Wednesday’s plunge when the BOE announced its emergency move.