The Liz Truss premiership didn’t just stumble — it imploded. In just 49 days, a radical economic plan turned into the most dramatic financial meltdown in modern British history. What began as a bold promise of growth through tax cuts ended with the Bank of England scrambling to inject £65 billion into bond markets, a Kwasi Kwarteng firing, and a prime minister forced to resign. The details, laid bare by Faisal Islam in his September 25, 2023 BBC analysis 'The Inside Story of the Mini-Budget Disaster', reveal not just policy failure — but a complete breakdown in judgment, communication, and institutional respect.
The Mini-Budget That Broke the Market
On September 23, 2022, with Parliament adjourned and the nation still mourning Queen Elizabeth II, Truss and Kwarteng unveiled their economic manifesto: sweeping tax cuts, unfunded and unmodeled. The top income tax rate was to be scrapped. Corporation tax was slashed from 19% to 15%. No borrowing plan. No independent forecast. Just a belief that growth would magically fill the fiscal hole. The markets didn’t just react — they panicked. The pound plunged to a 37-year low against the dollar. Long-term gilt yields spiked to 4.8%, the highest since 2008. Pension funds faced margin calls. The Bank of England had no choice but to step in with emergency bond purchases — a move usually reserved for global crises, not domestic political overreach.A Leadership in Freefall
Truss’s response? Double down. In her first public address on September 29, she told BBC Local Radio: “We’ve done the right thing by taking action urgently.” The line echoed in empty corridors. Behind the scenes, Conservative MPs were in shock. One anonymous MP called it a “mega-disaster,” comparing her performance to Jeremy Corbyn’s worst moments. Andrew Bridgen, MP for North West Leicestershire, openly warned of a leadership challenge. By October 8, The Observer poll showed Truss with a -47 approval rating — the lowest ever recorded for a sitting UK prime minister. A PeoplePolling survey two weeks later showed Labour leading the Conservatives by 34 points: 53% to 19%. Only 9% of respondents viewed Truss favorably. The numbers weren’t just bad — they were historic.The U-Turn That Killed Trussonomics
The reversal came fast. On October 3, Truss ordered Kwarteng to scrap the 45% top rate tax cut. By October 14, she fired him. Enter Jeremy Hunt, the former chancellor, who inherited a shattered economy. Within days, he reversed nearly every major policy: corporation tax stayed at 19%, the energy support scheme was restructured, and the fiscal responsibility framework was restored. Faisal Islam called it “the biggest U-turn in British economic history.” And with that, “Trussonomics” was officially dead. The phrase, once a rallying cry for free-market zealots, became a cautionary tale whispered in Westminster pubs.
Who Really Ran the Show?
The blame doesn’t rest solely on Truss. Her inner circle was a mix of ideological acolytes and political novices. Matthew Sinclair, her chief economic adviser, came from the free-market think tank TaxPayers’ Alliance — not the Treasury. Dominic Cummings, Boris Johnson’s former strategist, later said he’d “shouted at” Truss in Number 10 over her “compulsive pathological leaking.” The policy documents? Written without input from the Office for Budget Responsibility. The messaging? Laced with phrases like “revolutionizing growth” and “unleashing Britain” — language more suited to a startup pitch than a sovereign state’s fiscal plan. Edward Malnick of The Telegraph nailed it: “The problem wasn’t the policy. It was the people behind it.”The Aftermath: A Banker’s Revenge?
Even after her resignation on October 20, 2022, Truss didn’t let go. According to Financial Times reporter George Parker on April 16, 2024, Truss had seriously considered sacking Andrew Bailey, the Bank of England governor, for not warning her about the market turmoil. Bailey, in a November 2022 interview with Sky News, flatly denied any responsibility: “We don’t run fiscal policy. We respond to it.” The revelation adds a chilling layer: Truss didn’t just misread the economy — she misread the institutions meant to guard it. Her team later claimed the crisis was “a failure of Bank of England regulation.” The truth? It was a failure of political hubris.
Legacy of a Short Reign
Truss spent the rest of Rishi Sunak’s premiership on the backbenches. She lost her seat in the 2024 general election. Her economic experiment, once hailed by some as a bold break from austerity, is now taught in economics classrooms as a textbook case of supply-side overreach. The cost? £65 billion in emergency intervention. A collapse in investor confidence. A Conservative Party that lost 150 seats in the next election. And a public that lost faith — not just in her, but in the idea that ideology alone can fix a complex economy.What’s striking isn’t just the scale of the failure. It’s how quickly it happened. Four months from election to exile. A prime minister who thought she could rewrite the rules — and learned, too late, that markets don’t care about slogans.
Frequently Asked Questions
Why did the Bank of England have to step in with £65 billion?
The Bank intervened because the mini-budget caused gilt yields to surge, threatening pension funds and mortgage markets. With investors fleeing UK bonds, institutions faced margin calls. The £65 billion bond-buying program was an emergency stopgap to prevent a systemic collapse — similar to actions taken during the 2008 financial crisis, but triggered by domestic policy, not global contagion.
How did Truss’s approval rating become the worst in history?
Her -47 rating, recorded by The Observer on October 8, 2022, reflected a perfect storm: economic chaos, perceived incompetence, and a disconnect with public sentiment. While inflation was rising, her government cut taxes for the wealthy without funding public services. Voters saw it as unfair, reckless, and out of touch — especially after the death of the Queen.
What made Trussonomics different from previous Conservative policies?
Unlike past Tory tax cuts — like those under Margaret Thatcher or David Cameron — Trussonomics had no fiscal anchor. No independent costings. No medium-term plan. It relied entirely on the belief that growth would pay for itself, a theory that’s been repeatedly debunked by the Office for Budget Responsibility. Previous cuts were phased and paired with spending discipline. Truss’s were explosive.
Did anyone warn Truss before the mini-budget?
Yes. Former Chancellor George Osborne publicly criticized the plan. The Institute for Fiscal Studies warned of “massive fiscal risks.” Even some Conservative MPs privately urged caution. But Truss’s inner circle — dominated by ideologues like Sinclair and Kwarteng — dismissed these warnings as “status quo thinking.” The result? A policy launched without a single economic model validating its assumptions.
Why is the Financial Times’ April 2024 report about sacking Andrew Bailey significant?
It shows Truss never accepted responsibility. Blaming the Bank of England — an independent institution designed to be apolitical — reveals a fundamental misunderstanding of how the UK’s economic system works. The idea that she’d fire the governor for doing his job underscores the depth of her disconnect from institutional norms.
What’s the lasting impact on the UK economy?
The crisis damaged the UK’s reputation as a stable investment destination. Foreign investors demanded higher yields for UK bonds for months afterward. The pound remained weak. And the Conservative Party’s credibility on economic management was shattered — a wound still visible in the 2024 election results. The mini-budget didn’t just cost Truss her job — it cost Britain its economic credibility.
