British Prime Minister Truss vows to keep going as her party’s support wanes

LONDON (Reuters) – British Prime Minister Liz Truss warned of tough times ahead after she scrapped her sweeping tax cut plan and said she would continue to try to put the economy on a stronger footing, defying calls for her resignation.

After weeks of blaming “global headwinds” for investors dumping the pound and government bonds, Truss said on Monday she regretted going “too far and too quickly” with her radical economic plan to pull Britain out of years of tepid growth.

It was not clear whether the apology would quell a growing rebellion in her Conservative party, with a few lawmakers urging Truss to resign after just six weeks into her premiership.

Truss said she would keep fighting and told her top ministers she wanted to be on an equal footing with the public that tough times were ahead.

A new YouGov poll shows that even among Conservative Party members who backed her for prime minister, more than half of respondents said she should resign. And a third wanted the return of her predecessor, Boris Johnson.

Markets, which plunged after Truss’ “mini-budget” on September 23, are still under pressure even after Finance Minister Jeremy Hunt tore up her plans on Monday.

“I want to take responsibility and say sorry for the mistakes that were made,” Truss told the BBC late on Monday.

“I wanted to work to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too quickly.” Truss said she was “stumbling” and would lead the Conservatives to the next election due in about two years’ time, though the statement was accompanied by laughter.

Earlier on Monday, Truss watched silently in Parliament as Hunt tore up the plan she proposed less than a month ago, which sent the bond market crashing so deeply that the Bank of England had to act to prevent pension funds from collapsing.

‘honest’

For some in the party, the sight of the prime minister’s modest in Parliament did not give her much confidence in her ability to fight.

James Hebei, the secretary of the armed forces, said Truss, his boss, could not afford to make more mistakes.

Truss was later due to speak to pro-Brexit lawmakers, who are outraged that she has abandoned her campaign to cut taxes. The government urged members of parliament to refrain from any move to oust her before it presents its medium-term fiscal plan on October 31.

“The prime minister has said she wants to be honest with the public that times are going to be tough but by addressing the long-standing issues now, we can put the country on a stronger path for the future,” her spokesperson quoted her as telling ministers on Tuesday. .

Truss was elected by members of the Conservative Party, not by the broader electorate, on the promise of tax cuts and regulation to ignite the economy in a policy that critics have dubbed a return to Thatcher economics modeled on Thatcherism.

But the market reaction was so dramatic that borrowing costs rose, lenders withdrew mortgage offers and pension funds fell.

Ryan Air (RYA.I) Michael O’Leary, chairman of the board, called Britain’s economic situation a “car accident” and blamed it on his country’s decision to vote to leave the European Union in 2016.

Spending amount

With Britain’s economic reputation shattered, Hunt may now have to go further in finding cuts to public spending than the government would have done had Cos unleashed its economic plan at a time of high inflation.

A Truss spokesman said the government had not yet been able to make commitments in individual policy areas, despite previous pledges, but was focused on protecting the most vulnerable. He said Truss has made good on its pledge to increase defense spending by 2030.

Torsten Bell, head of Resolution, a think-tank, said the government may need to cut public spending by about 30 billion pounds ($34 billion) – a particularly difficult political task after successive Conservative governments have slashed departmental budgets over the past 10 years. .

Among the areas of spending already spent is the massive two-year energy support Trus package that was expected to cost more than 100 billion pounds, which Hunt said will now run until April before being revised.

(dollar = 0.8807 pounds)

Writing by Kate Holton and Elizabeth Piper; Additional reporting by William James, Andrew McCaskill, Kylie McClellan and Paul Sandell; Editing by Raisa Kasulowski, Gareth Jones and Thomas Janowski

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