Jeremy Hunt has been confirmed as the new chancellor of the exchequer after Kwasi Kwarteng was sacked by the prime minister this morning (October 10) after 38 days in the job.
Kwarteng was sacked earlier today after mounting pressure on the government to reverse the tax cuts announced in the “mini” Budget.
The policies triggered a rush for the door for gilt investors, and the pound sunk to its lowest value against the dollar after £43bn of unfunded tax cuts were unveiled.
After pressure from MPs, Truss sacked Kwarteng, saying she was “deeply sorry” to lose him from the government and “deeply respects” the decision he took to leave, despite Kwarteng saying Truss had asked him to step aside.
“Following the status quo was simply not an option,” Kwarteng said in his resignation letter.
Head of fixed interest research at Quilter Cheviot, Richard Carter, said Kwarteng's fate shows "just how serious" the UK's loss of credibility with the markets was.
"The market will have been craving a safe pair of hands to guide the UK through this difficult period, so it will be interesting to see how gilt yields and the pound respond to Jeremy Hunt being given the difficult task of running the public purse.
“How long he gets to do this for will ultimately be the next question," he said.
Hunt's CV
Hunt has been the MP for South West Surrey since 2005, and has served as secretary of state for foreign and commonwealth affairs, as well as for culture, Olympics, media and sport.
He has been the chairperson of the Commons health and social care select committee since 2020.
He garnered headlines during his time as health secretary between January and July 2018 after junior doctors went on strike in protest at changes to their contracts.
Hunt was knocked out in the final stage of the conservative party's leadership contest which was won by Boris Johnston, and lost in the early rounds of the most recent contest.
Edward Angar has been appointed as chief secretary to the Treasury, and Chris Philip is the new paymaster general and minister for the cabinet office.
The decision to bring in a new team is an attempt to quell the fissures in financial markets which have pushed up borrowing costs and pushed the value of the pound to its lowest point against the dollar.
Former chancellor Kwarteng introduced a number of tax cuts worth around £43bn last month in the "mini" Budget, in an attempt to boost growth in the UK.
This prompted a surge in gilt yields as it was announced without details of how it will be funded, as well as no economic forecast from the Office for Budget Responsibility, as is the norm.
Some tax cuts have since been reversed, such as the scrapping of the 45p higher income tax rate.
sally.hickey@ft.com
