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By Elizabeth Piper and Alistair Smout<\/p>\n
London \u2013 It was a bruising meeting with her Conservative lawmakers this week that finally shook British Prime Minister Liz Truss\u2019s earlier unwavering faith that she could weather the market fallout from her radical economic growth plan.<\/p>\n
Two days later, a chastened Truss addressed her first news conference as prime minister to admit she had gone \u201cfurther and faster\u201d than markets expected and sacked her friend and finance minister Kwasi Kwarteng to try to appease her lawmakers.<\/p>\n
Offering little in the way of apology, Truss instead insisted her government could not give up on economic growth, but would slow the pace and bring on board more centrist lawmakers to quell a rebellion in her party.<\/p>\n
She also dropped another of her pledges: to scrap a planned increase in corporation tax to try to calm markets, which had baulked at the size of her spending plans combined with the lack of detail about how they would be paid for.<\/p>\n
With her credibility in tatters, she is now fighting for her political survival.<\/p>\n
\u201cI want to deliver a low tax, high wage, high growth economy. It\u2019s what I was elected by my party to do. That mission remains,\u201d she told the news conference in a low voice, absent of the bravado that marked her appearances in a leadership campaign.<\/p>\n
\u201cBut it is clear that parts of our mini budget went further and faster than markets were expecting. So the way we are delivering our mission right now has to change. We need to act now to reassure the markets of our fiscal discipline.\u201d<\/p>\n It was a low-key almost solemn performance from a politician who bounded on stage and lapped up the applause from the party faithful during the leadership campaign when she beat her rival, Rishi Sunak, to become prime minister on September 6.<\/p>\n Then, buoyed by her victory, she felt she had no need to appoint anyone but her loyal supporters to her Cabinet team of top ministers, irritating some lawmakers who felt she should have tried to do more to unite the party.<\/p>\n Yet the signs were already there. She had won fewer votes than Sunak from lawmakers in earlier rounds of the leadership contest, and those who did not back her were quick to criticise her first steps in the role.<\/p>\n \u2018BADLY WOUNDED\u2019<\/strong><\/p>\n When Truss unveiled her economic programme on September 23 and the markets plunged, that criticism grew, and even those who had supported her wondered out loud why she had failed to prepare not only the markets but the country for the scale of her tax-cutting plans.<\/p>\n She explained to lawmakers she had to act quickly to help families and businesses with sky-rocketing energy bills, but few understood why her economic programme had to be launched at exactly the same time \u2013 a mis-step she later admitted.<\/p>\n But instead of trying to bring in frustrated lawmakers, those closest to her said she pressed on with her plan in her Downing Street office, convinced the markets had overreacted and would calm down when they understood what she wanted to achieve.<\/p>\n That did not happen. As markets tumbled the Bank of England was forced to intervene and, more crucially for many of her lawmakers, a surge in borrowing costs pushed up mortgage rates.<\/p>\n First she U-turned on her pledge to scrap the top tax rate at her party\u2019s annual conference earlier this month, and on Wednesday she met her lawmakers in parliament convinced her measures must have steadied the waters.<\/p>\n Yet she was \u201creceived only politely\u201d, said one lawmaker present at the meeting. Then the criticism began.<\/p>\n \u201cIt\u2019s an extraordinary situation that we\u2019ve got a prime minister who has been in post for just over a month but she\u2019s not got the full-throated, unanimous support of the parliamentary party which is worrying,\u201d the lawmaker said at the time.<\/p>\n \u201cShe\u2019s got to up her game\u2026 and I think she knows she\u2019s got to up her game.\u201d<\/p>\n Friday\u2019s second tax reversal and the sacking of her close friend Kwarteng was the latest roll of the dice to try to save her premiership, just over a month old.<\/p>\n She is \u201cbadly wounded\u201d, another Conservative lawmaker said, adding it was a \u201cmess\u201d.<\/p>\n Truss has also lost an important ally and, according to one person close to her, an important source of support in Kwarteng. But a veteran Conservative insider said it was simply a case of survival.<\/p>\n \u201cShe doesn\u2019t need his support at the moment,\u201d a Conservative insider said. \u201cShe needs MPs\u2019 (members of parliament) support.\u201d<\/p>\n
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