Truss says British economy ‘needs a reset’ after market sell-off

Prime minister Liz Truss has said that “Britain’s economy needs a reset” and pledged to prioritise “aspiration, enterprise and growth” as the Conservative party prepares to gather for its annual conference in the wake of a week of market turmoil.

MPs and party members will convene on Sunday in Birmingham, and Truss is expected to seek to rally their support for her political vision.

She faces rising discontent over the government’s £45bn “mini” Budget last week, after which the pound fell to a record low against the dollar, gilts sold off sharply, banks pulled thousands of mortgage products and the Bank of England launched a £65bn bond-buying scheme to stabilise government debt markets.

Truss said on Saturday evening that the Conservatives were “the party of aspiration, enterprise and growth”.

“We believe in making it easier for our wealth creators, doers and makers to get things done,” she said. “Britain’s economy needs a reset. We cannot continue on the current trajectory of managed decline. Instead, we must take a new direction. I will lead us down that path to a better future.” 

The overarching theme of the four-day conference will be “Getting Britain Moving” and speakers will address issues such as the public services and boosting economic growth.

Truss, who will address Tory members on Wednesday, is expected to argue that the party remains committed to fiscal responsibility and that a high-tax, low-growth economy is an unsustainable approach.

Yet some within the party have voiced alarm at the impact of the government’s economic plans on public confidence. On Friday, Tory grandee Charles Walker warned that the Tories were at risk of losing the next general election as he stressed that they had a responsibility to “get the public finances in the best shape possible”. 

Recent polling has indicated widespread public dissatisfaction with the government, with Labour rising to a 33 point lead according to a poll published earlier this week by YouGov.

In the Sun newspaper over the weekend, Truss conceded that her government’s “mini” Budget had caused short-term “disruption”, but insisted that she had an “iron grip on the national finances”.

“Not everyone will like what we are doing, but I want to reassure the public that the government has a clear plan that I believe is right for the country,” Truss wrote.

Truss and chancellor Kwasi Kwarteng met officials from the Office for Budget Responsibility on Friday in a bid to reassure them of their commitment to reducing debt and boosting growth.

Writing in the Telegraph newspaper, Kwarteng argued that even in the face of “extreme volatility in global markets”, the government would prove to investors that their economic plan was “sound, credible and will work to drive growth”. He will address Tory MPs on Monday.

The chancellor is expected to outline his fiscal plans on November 23, alongside forecasts of the economic impact of the government’s policies by the OBR.

Levelling-up secretary Simon Clarke warned that cuts to public spending may be needed to support the government’s policies. “I do think it’s very hard to cut taxes if you don’t have the commensurate profile of spending and the supply side reform,” he said in an interview with the Times newspaper.

Speaking on Saturday, Welsh secretary Robert Buckland denied that investors’ unease was solely because of the “mini” Budget.

“We have seen weakness in the pound, the yen, the euro against the dollar over the past few months,” he told BBC Radio 4’s Today programme on Saturday. “I don’t think it would be fair to say that Friday was the sole cause of the turbulence.”