Economics: It Was The Mini-budget That Broke Britain And The PM

Britain has been through the wringer since last month's mini-budget. Not only was Kwasi Kwarteng's not-so-mini plan the trigger for a domestic financial crisis and higher mortgage costs for millions, it was also the start of his political downfall and that of his close friend, Liz Truss.

- Richard Partington

It was all supposed to be so different. Truss had spent the summer promising to cancel the rise in national insurance and corporation tax in the Conservative leadership race. Those pledges, plus her popular energy price freeze, would have been plenty for the government to announce in the supposedly stripped-back event.

Instead, it was a bumper, ideologically driven occasion that left Truss's defeated rival, Rishi Sunak, vindicated. As he had warned, there was indeed a run on sterling: the gilt market went into freefall and global investors were spooked. Even the International Monetary Fund (IMF) intervened with a stunning public rebuke.

Rarely has a budget caused such political and economic damage. Not even George Osborne's "omnishambles", when he was forced in 2012 to back down from his "pasty tax", comes close.

Initially hailed by her supporters as "at last, a true Tory budget", the "mini" fiscal event included the biggest tax cuts since 1972, funded by a vast expansion in borrowing and with only a vague attempt to argue that it could be paid for by an unlikely economic boom.