LONDON (Reuters) -- Prime Minister Liz Truss apologized for threatening Britain’s economic stability after she was forced to scrap her vast tax-cutting plans and embark on a program of “eye-watering” public spending cuts instead.
After weeks of blaming the markets and “global headwinds” for investors dumping the pound and government bonds, Truss said she was sorry for going “too far and too fast” with her radical economic plan to snap Britain out of years of stagnant growth.
Markets, plunged into turmoil after her Sept. 23 “mini-budget”, are still under strain even after Truss’s finance minister Jeremy Hunt tore up her plans on Monday.
It was also not clear whether Truss’s apology would quell a growing rebellion in her governing Conservative Party, with a handful of lawmakers calling for her to quit, while dozens of others are fearing they will lose their jobs in a new election.
Even one of her ministers said she could not afford to make any more mistakes - something that could be difficult when her government looks for deep savings. Already Hunt has refused to guarantee the budgets of departments like health and defense.
Truss’s decision to pull her economic program has so far eased some of the pressure on Britain’s elevated borrowing costs, but the scale of the reversal means she is now fighting to survive, just six weeks after she became prime minister.
The withdrawal of a two-year energy support scheme plus possible changes to pension and welfare benefit levels means the country’s looming recession is expected to deepen, as households struggle with surging energy and food costs.
“I do want to accept responsibility and say sorry for the mistakes that have been made,” Truss told the BBC late on Monday.
“I wanted to act to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too fast.” She added she was “sticking around” and that she would lead the Conservatives into the next election due in about two years time, although the statement was accompanied by a laugh.
Truss watched silently in parliament on Monday as Hunt demolished the radical economic agenda she proposed less than a month ago, and which triggered a bond market rout so deep that the Bank of England had to intervene to prevent pension funds from collapsing.
For some in the party, the sight of a prime minister humbled in parliament did little to offer any confidence she could fight on.
The Daily Mail, which had hailed Truss’s plan, ran a front page with the prime minister leaving parliament on Monday underneath the headline “In office, but not in power” while the also supportive Sun newspaper called her “The Ghost PM”.
James Heappey, a minister for the armed forces, said Truss, his boss, could not afford to make any more mistakes. “To her credit, she has owned it and apologized,” he told Sky News.