Liz Truss acknowledged that she and her government lost the confidence of financial markets after the October 2022 mini-budget – but refused to apologize to homeowners for higher interest rates.
Talking to Sky News, the former prime minister blamed the Bank of England for its downfall, particularly Governor Andrew Bailey. However, she said she did not meet Bailey once during her tenure.
“I actually had a meeting scheduled – I wanted to meet him,” she said. “But I was warned that it would be a bad idea. And maybe I shouldn’t have followed that advice.
“But that advice came from the cabinet secretary and what I didn’t want to do was make the situation even worse. [market] problems.
“In hindsight, yes, I probably should have spoken directly to the governor of the Bank of England at the time.”
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Asked about the consequences the mini-budgetin which your chancellor Kwasi Kwarteng announced a series of unfunded tax cuts without providing evidence of how it would pay for them, Ms Truss said: “It’s fair to say that the government did not have the confidence of the markets…
“But if there are organizations within the State, like the Bank of England, like the Office for Budgetary Responsibility, that make it very clear to people that they do not support the policies that are being followed and that they are essentially undermining those policies, then it is difficult build trust in the markets – because the markets expect the government to have that leadership.”
During Truss’s short tenurethe expected path for the Bank’s interest rate next year rose from less than 4% to around 6%.
Although these rates were rising before the tax event, they shot up dramatically in the wake of the mini-budget, rising further when, a few days later, Mr Kwarteng promised yet more tax cuts.
This sharp rise in interest rates precipitated a short-lived crisis in UK financial markets, which triggered the near-collapse of the liability-oriented investment trusts (LDI) that underpin the pensions market.
Asked whether she would apologize for the sharp rise in interest rates during her tenure, Truss said: “I question the premise of what you are asking me, because mortgage rates have risen around the world.
“The issues I faced in office were issues of not being able to deliver on the agenda due to deep resistance within the system.”
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Liz Truss alongside Kwasi Kwarteng at the mini-budget announcement in September 2022. Photo: UK Parliament/Jessica Taylor/Disclosure via Reuters
She continued: “I think it’s wrong to suggest I’m responsible for Britons paying higher mortgages. This is something that has happened in every country in the free world.
“I’m not saying that I got everything absolutely perfect in the way the policy was communicated. But what I am saying is that I faced real resistance and actions from the Bank of England that undermined my policy and created problems in the market.”
Ms Truss was speaking to Sky News in Washington DC on the North American leg of her publicity tour for his new book, Ten Years to Save the West.
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Since publication, it has been discovered that one of the quotes she used in the book, attributed to Mayer Amschel Rothschild, is in fact a false quote, often used in an anti-Semitic context.
Truss said: “I’m really sorry about that. It was a complete mistake. It was something I found online and I apologized to the British Board of Deputies for it.
“It will be removed from all future editions of the book and the online edition.”
Asked if she currently feels more at home in the US than in the UK, she said: “Well, I like aspects of American politics. I believe that in economics the US got it more right than the UK.
“My heart is in Britain. But I think you have to be prepared to learn from other countries that have this success.”
You can watch the full interview with the former Prime Minister on Sky News’ Sunday Morning with Trevor Phillips from 8.30am this morning. Trevor is also joined by Energy Security and Net Zero Secretary Claire Coutinho, Shadow Justice Secretary Shabana Mahmood and Reform UK leader Richard Tice.
This story originally appeared on News.sky.com read the full story
