During the 2022 Conservative party leadership election, Liz Truss campaigned for actioning an emergency budget that contained a set of economic policies and tax cuts. 

After the successful election of Liz Truss, on 23 September 2022, a mini-budget was announced. The now-former Chancellor Kwasi Kwarteng delivered a mini-budget titled "The Growth Plan". The mini-budget was met with massive criticism across the board. The main criticism focused on the fact that the budget execution would require even more increased borrowing. The radical proposals in the budget placed the UK economy into even more significant turmoil.

Immediately after the mini-budget was announced, the pound had hit an all-time low against the US dollar, and economists warned about the budget's reliance on borrowing to pay for the tax cuts. Moreover, the International Monetary Fund wrote a letter publicly expressing its disapproval of the new budget and urged the UK government to reconsider announced tax cuts.

Met with huge criticism on 14 October 2022, Liz Truss asked Kwasi Kwarteng to resign, and the new Chancellor, Jeremy Hunt, was appointed.

The newly appointed Chancellor reversed most of the proposed tax cuts, which were met with overall market approval.

The main measures from the mini-budget that were reversed:

• The main rate of Corporation Tax will be increased to 25%
• The planned increase in the duties of beer, cider, wine and spirits was scrapped. The price will remain the same.
• The basic rate of income tax will be reduced from 20% to 19%
• The 45% additional rate of income tax is also scrapped
• A 1.25 percentage points increase to dividend tax is here to stay
• Off-payroll working (IR35) measures introduced in 2017, and 2021 were cancelled
• The planned cap on energy bills is now only guaranteed until April 2023
• Tax-free shopping for non-UK visitors was scrapped

The announcements from the mini-budget that remained:

• National Insurance increase reversed
• Stamp Duty cut - no duty on the first £250,000 of property value in England and no duty on the first £425,000 for time buyers
• Business Energy Relief Scheme will continue as planned
• An annual Investment Allowance (AIA) of £1 million per annum will be made permanent.

After only 45 days in office, on 20 October 2022, UK Prime Minister Liz Truss resigned and was replaced by Rishi Sunak.

Sources reported that the London stock market closed higher than previously immediately after Truss' resignation, and the pound recovered over $1.13.

Paul Dales from Capital Economics on Liz Truss' resignation:

"Overall, the resignation of Truss is a step that needed to happen for the UK government to move further along the path towards restoring credibility in the eyes of the financial market.

"But more needs to be done, and the new prime minister and their Chancellor have a big task to navigate the economy through the cost of living crisis, cost of borrowing crisis and the cost of credibility crisis. The situation is clearly going to evolve very quickly."

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