Liz Truss’s resignation as Prime Minister was welcomed by those in the mortgage industry, with Staton Mortgages director Mike Staton suggesting she only made one correct decision during her term “and she took it today by handing in his resignation”.
Truss addressed the country outside Downing Street just after 1.30pm today. In the announcement, she said: ‘I recognise, however, given the circumstances, that I cannot fulfill the term for which I was elected by the Conservative Party. So I spoke to His Majesty the King to inform him of my resignation as leader of the Conservative Party.
When the bank said no, Chief Executive Emma Jones said, “We desperately need stability and it is nowhere to be found.
“This country needs a Prime Minister who has the integrity and the ability to put his own ego aside and do what is good for the UK economy. We need fixed mortgage rates to reduce, to allow people in more complex loan situations to pay their payments.
Earlier today, Truss said: “This morning I met the Chairman of the 1922 Committee, Sir Graham Brady. We have agreed that there will be a leadership election next week.
“This will ensure that we remain on track to achieve our fiscal plans and maintain our country’s economic stability and national security,” she added.
Truss, who spent just 44 days in office, said she would remain prime minister until a successor was chosen.
CBI Director General Tony Danker comments: “The politics of recent weeks have undermined the confidence of people, businesses, markets and global investors in Britain. This must now stop if we are to avoid even more damage to households and businesses.
“Stability is key. The next prime minister will need to act to restore trust from day one.
“They will have to present a credible medium-term fiscal plan and a plan for the long-term growth of our economy as soon as possible.”
R3 Mortgages director Riz Malik said markets “should react positively, which may influence the Monetary Policy Committee (MPC) for its next base rate decision.”
The next meeting of the MPC is scheduled for November 3.
But, says Malik: “Halloween will be the next key date, especially if the next prime minister is installed by then. I don’t expect lenders to start cutting rates until sanity has been restored to Westminster.
Last week, Truss sacks Kwasi Kwarteng as chancellor after 38 days in the role and replaced him with former Health Secretary Jeremy Hunt.
Following the dismissal of Kwarteng, the new chancellor Hunt confirmed the cancellation of almost all tax cuts announced in the September mini-budget. However, the stamp duty reduction for home purchases remained.
On October 10, the government confirmed that it would release its spending plan and the Office for Budget Responsibility (OBR) economic forecast on October 31.
The OBR’s medium-term fiscal plan and forecast was originally scheduled for November 23.
Also commenting on today’s news, Giles Coghlan, Chief Markets Analyst at HYCM, said: “After just 44 days in office, it appears the markets and a party in open revolt have sealed the fate of Liz Truss. .”
“Although Truss was bound to usher in an era of growth and ‘economic fallout’, her vigorous pro-growth policies were mistimed, sending UK bond markets into a sharp sell-off as her policies stoked flames of soaring inflation.”
“To ward off instability, the Bank of England has even intervened in the gilt markets, and it remains to be seen whether the central bank will now raise interest rates faster.”
“With all of that in mind, Truss’s departure should be slightly positive for the pound, depending on his successor as Prime Minister. Already, the UK gilt market was supported as rumors of the prime minister’s resignation emerged this morning, which is a good sign for the stability of the pound.