Chancellor Kwasi Kwarteng has been sacked after just six weeks in the role.
In a letter to the Prime Minister, he said it was an “incredibly difficult” time to take the job.
Cementing himself as the second shortest-serving chancellor, Kwarteng, who was the UK’s business secretary before moving to Number 11 Downing Street, commended Liz Truss’ “vision of optimism, growth and change”.
He described it as the right approach at a time of “rising global interest rates and energy prices”.
Confirming that Kwarteng had been let go Truss wrote that she “deeply respects” the former Chancellor’s decision to “put the national interest first”.
In a press conference held soon after the announcement of Kwarteng’s sacking the prime minister said: “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, I have therefore decided to keep the increase in cooperation tax that was planned by the previous government.”
Truss claims this will raise £18 billion per year and act as a “down payment” on her government’s full medium-term fiscal plan.
The questions levelled at Truss following her statement focussed on her credibility as a leader, asking whether or not she should step down from her role.
The prime minister has confirmed that Jeremy Hunt will take over from Mr Kwarteng.
Truss described the new chancellor as “one of the most experienced and widely respected government ministers and parliamentarians and he shares my convictions and ambitions for our country.”
It was announced that Hunt will deliver the medium-term fiscal plan by the end of this month.
— UK Prime Minister (@10DowningStreet) October 14, 2022
However, Labour’s shadow chancellor, Rachel Reeves, said: “Changing the chancellor doesn’t undo the damage that’s already been done.
“It was a crisis made in Downing Street. Liz Truss and the Conservatives crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage.
“We don’t just need a change in chancellor, we need a change in government. Only Labour offers the leadership and ideas Britain needs to secure the economy and get out of this mess.”