Liz Truss announced Thursday that she will step down as UK prime minister. Her resignation comes after the announcement of her fiscal policies caused strong tensions in the financial markets, forcing her to back down from her plans.
The pound experienced a rise in the market after hearing the news. The EUR/GBP erased daily losses and trades in the 0.8700 area, while the GBP/USD posted daily highs above 1.1300 and then clipped part of the way up.
Truss will remain in office until a new Conservative Party leadership election is held next week. In this way, she would become the leader who lasted the shortest in office in British history.
She had come to office after an election of more than a month in the Conservative Party, to choose the replacement for Boris Johnson. The announcement of her tax plans had led to a sharp devaluation of the pound sterling and a crash in British sovereign bonds. This was followed by a general rejection of the ads, even among conservatives themselves.
In expressing his resignation, Truss indicated that she cannot fulfill the mandate for which she was elected by the Conservative Party. Labor Party leader Keir Starmer reiterated her call for a general election after Truss resigned.
Source: Fx Street
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