Liz Truss’s leadership pitch “promised radicalism, but up to a point”, says Fraser Nelson in The Daily Telegraph. Almost no one expected the “sheer size” of the £45bn in tax cuts Kwasi Kwarteng announced last week. The timing was terrible: trying to “rip up failed orthodoxies” and “purge complacent mandarins” is all very well, but doing it at the same time as asking markets to lend you an extra £70bn? That is, “shall we say, brave”. The world is midway through an “agonising” transition away from the easy-money era. “Mortgage rates have been surging from Auckland to Arizona.” Truss should have waited until this took hold in Britain before announcing her financial plans. “Now,” says one minister, “she has pinned a Tory rosette to mortgage rises.”
Tax cuts are Truss and Kwarteng’s “shared faith”, says James Forsyth in The Times, so they’re unlikely to row back on them now. The next step is real-terms spending cuts, by freezing government budgets rather than raising them in line with inflation. This is politically risky: depriving the NHS of cash would mean every problem it encounters this winter “gets blamed on the Tories”. It also means little room for pay bumps for employees. When you’re borrowing money to cut taxes for the rich, “how do you explain that there is no money for a close-to-inflation pay rise for nurses”? It’s hard to see a way forward for No 10 “that is both politically palatable and economically possible”.