Liz Truss has sacked Kwasi Kwarteng as chancellor. It is a truly remarkable development. Truss and Kwarteng were even more part of a joint political project than David Cameron and George Osborne. The mini-Budget was an expression of their joint beliefs: his dismissal is a sign of how bad things really are. Less than six weeks into her premiership and she has sacrificed her closest ideological ally to try and shore up her position.
Truss will hold a press conference at 2 p.m. In it, we can expect a U-turn on freezing corporation tax to be announced – the markets assume it is happening and with the Bank of England’s intervention coming to an end this afternoon, not announcing one would risk sending the markets into a tailspin.
The two most likely candidates to replace Kwarteng are Nadhim Zahawi, who did the job over the summer in Boris Johnson’s ‘zombie government’ and Sajid Javid, who has been chancellor before and knows Bank of England Governor Andrew Bailey well, having appointed him to his current role. What is certain is that whichever of them takes the keys to No. 11 will have immense power. Truss cannot afford to lose a second chancellor.