Will Liz Truss survive Monday’s market turmoil?

All eyes will be on the markets as economic indicators pass judgment on the u-turning British Prime Minister.

British Prime Minister Liz Truss is already under immense pressure to keep her job. Picture: Getty Images

All eyes will be on the markets in London on Monday as economic indicators pass judgment on the u-turning British Prime Minister Liz Truss.

The United Kingdom has been in utter disbelief at the political shambles and Tory party internecine battles, but more rollercoaster turmoil on the gilt and bond markets could play straight into the hands of the failed Conservative contender, former chancellor Rishi Sunak.

While the markets last week punished Ms Truss’s plans for tax reductions, funded by more borrowing, her dramatic moves on Friday to sack the chancellor of the exchequer, her close friend Kwasi Kwarteng, was mooted to save her own premiership.

She may have bought some time, but the dismal showing of the Torys in the polls – as much as 30 points behind Labour – will ultimately force the party’s hand. The question is the speed of any removal.

Britain's dismissed Chancellor of the Exchequer Kwasi Kwarteng walks out of Number 11 Downing Street in London on Friday. Picture: AFP

On Sunday, Ms Truss’s new chancellor Jeremy Hunt – another Tory leadership contender who lost the run off against Boris Johnson – met at Chequers to fine-tune plans for the mini-budget, the Medium-Term Fiscal Plan, for October 31.

Yet some backbench critics, shocked by the prime minister’s less than convincing eight-minute press conference last Friday, where she failed to address her abrupt about turn on tax cuts to stimulate growth, believe she may not last the week.

Ms Truss abandoned her business growth strategy, including a dramatic reverse of a six percentage point tax cut for corporations, in an effort to avoid a run on the pound sterling and a possible collapse of pension funds.

The Daily Star is running a live YouTube feed of a lettuce next to a photo of Ms Truss, questioning “Will Liz Truss still be Prime Minister within the 10 day shelf-life of a lettuce?”

On Sunday a Tory MP planning on retiring at the next election, Crispin Blunt, became the first backbencher to call for Ms Truss’s resignation – and said the Prime Minister should quit “now”.

Mr Blunt called for a leadership trio of Jeremy Hunt, Rishi Sunak and another former Tory leadership contender Penny Mordaunt.

Mr Blunt told Channel 4’s Andrew Neil Show: “I think the game’s up and it’s now a question as to how the succession is managed.”

Earlier on Sunday, Mr Hunt prepared to delay yet another tax cut, that of a 1p cut to income tax, coming on top of Ms Truss’s reversal to lower corporations tax and national insurance.

Mr Hunt was even put in the bizarre position of reassuring the nation during appearances on Sunday political shows that the Prime Minister was still in charge of the country and of the economic policy.

Six weeks after winning the Tory leadership – voted on by Tory members after winning 30 per cent of the vote of Tory MPs to make the final two candidates, Ms Truss is up against ego-driven personalities heading a myriad of factions.

She has an almost impossible task – of re-establishing a semblance of credibility and keeping her Tory critics silenced. All the while the all-powerful bond markets will make their judgments and supporters of Mr Sunak, considered the most economic-literate, could try to convince the party their man is the only means to bring about economic stability.

However, within the Tory party some believe the only solution to the upheaval is a unity candidate, someone who can unite the bitter factions and avoid yet another long winded leadership ballot.

That person, who could be coronated if Ms Truss decides to stand down, is touted to be the defence minister Ben Wallace.