UK prime minister resigns 'End of economic stimulus through interest rates, political games and tax cuts'

In response to British Prime Minister Leeds Truss's shortest resignation, the US media released an evaluation that "the stimulus is over due to tax cuts that depend on interest rates and the debt economy in the political game."
“The market is driven by broader global trends rather than tax cuts,” Harvard University economist Kennis Lokoff told The New York Times on the 20th.
At the National Assembly on the 21st, Deputy Prime Minister Choo Kyung-ho, who promoted the tax cut policy, said, "The UK's spending increase, tax cuts and programs are different."

Deputy Prime Minister Chu said in the United States on the 15th that "the government will abolish taxes on foreign income from investments in government bonds and monetary stabilization bonds starting from the 17th."

He continued, "We were included on the WGBI watch list at the end of September, but we thought we needed a quick move to attract more foreign investment to the government bond market," he said. <See G7 Finance Minister's strong dollar '150 yen' for Chinese 'dollar exchange', dated October 17, 2022>

"The resignation of Prime Minister Truss is a reminder of how high inflation and rising interest rates have changed the game for politicians and left little room for maneuver," the Wall Street Journal reported. “It gave me room to spend more and build up debt, but those days are now over,” he said on the 20th.
The WSJ continued: “The first treasury ( Kwarteng) wanted to stimulate growth by cutting taxes and pour billions of pounds into subsidies to protect homes and businesses from rising energy bills, but crucially this would be paid by borrowing rather than spending cuts. "This time, the market reaction was severe, and the pound fell to an all-time low," he said.
"Prime Minister Truss' fate was sealed three weeks ago when currency and bond traders responded to a new fiscal program with torpedo pounds and other British financial assets," The New York Times reported. has shattered her trust, tarnished Britain's reputation with investors, lowered the pound to nearly the equivalent of the US dollar on mortgage rate hikes, and forced the Bank of England to intervene to support British bonds." he said today.
The New York Times pointed out market unrest that outweighed political unrest: "The dissatisfaction measured by the second fluctuations in bond yields and exchange rates outweighed the greenhouse uneasiness of Conservative lawmakers that made her incapable of maintaining her position."
"It was the wrong combination of fiscal policy at the wrong time," said Jonathan Potts, professor of economics and public policy at King's College London. We broke the custom by not obeying the investigation and announcing a full-scale tax cut.”

Former Finance Minister Kwarteng, who was ousted, was a PhD in the history of financial crisis at the University of Cambridge.

After her resignation, Prime Minister Truss built a long-standing reputation as a disruptor and liberal market evangelist in the hardline conservative traditions of Margaret Thatcher and Ronald Reagan.
NYT London bureau chief Mark Randler wrote in an article: "Her tax cut proposals have made her strange among big economic leaders battling inflation." We did not apologize for violating our expectations.”
The WSJ said, “Before taking office as prime minister, the cost of borrowing in the UK was much lower than that of the US on September 1, so the UK 10-year Treasury yield of 2.882% compared to the US 10-year yield of 3.264%. “In just a few days, the UK 10-year benchmark borrowing cost was more than half that of the US, and the additional cost of rising was related to derivatives in the pension market.”
After the UK government withdrew its tax cut plan, the 10-year UK Treasury yield fell to 3.910% on the 20th, lower than the 4.210% US Treasury bond. Treasury yields fell as prices rose.