In the end, Liz Truss lasted less than seven weeks in the job. Never the first choice of Tory MPs, the decisions she made as prime minister finished her off at record pace.
She will be, by some distance, the United Kingdom’s shortest-ever serving prime minister. Her allies promised “shock and awe” when she entered Number 10, but few predicted that she would turn Westminster into such a disaster zone.
Today, there’s a collective sense of shock, rather like the aftermath of a car crash, where you emerge from the wreckage dazed and confused, asking yourself what just happened.
In the case of the Truss administration, the question is how on earth did the wheels come off the government so quickly and spectacularly? And what does that mean for the Conservative Party, our politics and the country now?
The central mistake of Liz Truss was to treat the business of government rather like a continuation of her election campaign. She made all sorts of promises to party members – on tax cuts and on spending commitments in order to win them over. When she entered Number 10, she didn’t recalibrate or compromise.
I remember the interview I did with her just days before her mini-budget at the top of the Empire State Building in New York when she told me, “I am prepared to be unpopular,” in order to push through her economic plan. She perhaps thought it was a show of strength. It turned out to be incredibly foolhardy.
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It led to fatal errors that cost Ms Truss her job. Instead of consulting the markets, taking soundings from the Treasury, or even gauging the views of her cabinet properly, she and her then chancellor Kwasi Kwateng unleashed £45bn of unfunded tax cuts on the markets in a mini-budget that went even further than she had signalled in her leadership race.
I had thought when Ms Truss became prime minister, she might have stuck to commitments on tax cuts but staggered them in a way that might have been more palatable to the markets.
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She did not, and she paid a heavy political price over the following weeks. Forced to U-turn on plans to scrap the 45p rate of tax, then sacking her chancellor before the incoming one, Jeremy Hunt, just about junked her entire economic plan. By Monday this week, it was clear that Liz Truss was a Prime Minister without a policy platform and out of control of her party.
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3:41
As Liz Truss resigns as prime minister, we take a look back on her political journey.
But the British public was also paying the price for her reckless decisions, with interest rates rising faster than had been anticipated before that mini-budget amid a cost of living crisis in which inflation hit a record 40-year high in September.
She has become one of the UK’s most unpopular prime ministers in the space of just a few weeks – with just one in ten Britons satisfied with her leadership. An unrecoverable position, it was clear to me after that fateful press conference where Ms Truss sacked her chancellor that the game was up – what was less clear was how it would end.
That ending was accelerated by the chaos of the fracking vote on Thursday night. Ahead of that horror show, senior influential figures in the party had told me that there was no appetite to remove Ms Truss before the critical fiscal statement on October 31.
Image: Pics: REUTERS/Henry Nicholls
They worried this could further unsettle markets: “The media mood I think is more febrile that the parliamentary mood,” one person familiar with the discussions of the 1922 committee told me soon after PMQs.
But that all changed after the evening of chaos, confusion of whips’ resignations and altercations in the voting lobbies between Conservative MPs.
“Everything that happened today could have been avoided, if it had been better managed,” remarked one wise former cabinet minister to me late on Wednesday night. “They didn’t have to create crisis points in terms of whipping votes. That they did is a symptom of where we are.”
But it did trigger a crisis – one which took a life of its own. As Boris Johnson said of his own infamous demise, “when the herd moves, it moves.” The momentum built and the party moved quickly. By Thursday lunchtime, Ms Truss announced she was out.
But the speed was also hastened not just by policy decisions but by politics. This was a prime minister who only ever had the public support of 42% of MPs, despite being nailed onto win for weeks.
It told us that Ms Truss was always going to have a problem winning over the parliamentary party, but instead of recognising her limitations and building a cabinet from different wings of the party, Ms Truss doubled down on winning power.
Image: Rishi Sunak leaves his house in London
She kept Sunak supporters out of office and rewarded her allies. It meant that she was not sufficiently challenged by the cabinet in decision-making and failed to garner any goodwill from the wider parliamentary party.
There is also a view from those former cabinet ministers who were agitating from the outset that Ms Truss was never really up to the job in the first place. When her policy platform sparked such dire consequences, the public concluded that too. So she had to go.
But three prime ministers in four months and endless infighting – all during a cost of living crisis – is the worst possible advertisement of a party that wants to convince the public it is fit to lead the country.
Labour want a general election, calling the Conservatives a “coalition of chaos.” The public, meanwhile, are thoroughly fed up, with Labour now consistently polling 20 to 30 percentage points ahead of the Tories.
That is why 1992 chair Sir Graham Brady and the Conservative Party want to replace the prime minister within a week. It is an attempt to get on with the business of government and try to prove to the public that the Tories are capable of governing.
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2:09
Labour leader Sir Keir Starmer calls for a general election
But the mood in the party is desperate. Senior MPs tell me they think there’s little chance of winning the next general election, and the latest iteration of this Conservative psychodrama is designed not to win but to try to limit the losses.
So this will be a short, sharp contest with the aim of installing a new PM within the week. Nominations close on Monday at 2pm, and any candidate who wants to stand has to win 100 nominations. As things stand, it looks to me that the only two candidates that could reach the threshold are Rishi Sunak, who won 137 votes in the last contest, and Penny Mordaunt, who reached 105.
If only one of the candidates crosses the magic 100 threshold, we will know on Monday who will be the next prime minister. The party knows it’s on borrowed time with a fulminating public. This has to end, and soon. “We are deeply conscious – its imperative in the national interest – in resolving this clearly and quickly,” Sir Graham told me this afternoon.
Labour want a general election, the Conservatives will resist. But the question that is first and foremost in my mind, after the second bout of vicious bloodletting in the Conservative Party in just four months, is whether MPs can come together behind whoever takes over?
Some think the divisions and the grievances are just too deep. The Johnsonites will never accept Rishi Sunak; the Sunakites rounded on Ms Truss and might round on the next leader too, should their man not take the crown. We will have a new prime minister, but its hard to see how it stops the rot.
Watch a special programme tonight at 7pm with Dermot Murnaghan on Sky News
Canada’s prime minister Justin Trudeau has labelled new tariffs imposed by US president Donald Trump as a “dumb thing to do”.
It was confirmed overnight that tariffs on goods coming into the US from Mexico, Canada and China had come into effect.
Mr Trump’s expansion of tariffs to cover the top three trading partners of the United States has been met with promises of retaliation and a retreat in stock market values globally.
Mr Trudeau, speaking in a press conference on Tuesday, said his government would file a legal challenge against the US at the World Trade Organisation, and that Canada was considering its options.
“Today the United States has launched a trade war against Canada, its closest partner and ally, its closest friend,” he said.
“They have chosen to sabotage their agenda. There is absolutely no justification or need for these tariffs today.”
Image: Justin Trudeau holds a news conference on Trump’s new tarrifs.
Pic: The Canadian Press/AP
He also described the tariffs as a “dumb thing to do” and that it undermined his understanding of an agreement he made with Mr Trump over fentanyl production.
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Mr Trudeau also warned it would impact American workplaces and add to inflation in the US.
Addressing the American public, he said: “We don’t want this… but your government has chosen to do this to you.”
The new tariffs will be felt heavily by all exporters in those countries, but also by US companies which rely on supplies from them.
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2:45
What is America’s trade position?
Mexico and Canada face tariffs of 25%, with 10% for Canadian energy. Tariffs on Chinese imports have doubled, raising them from 10% to 20%.
Canada announced it would retaliate immediately, imposing 25% tariffs on US imports worth C$30bn (£16.3bn).
It added that the tariffs would be extended in 21 days to cover more US goods entering the country without a climbdown.
Mr Trump responded by saying that he would match any Canadian tariffs immediately through higher duties.
At a news conference, outgoing prime minister Justin Trudeau described the tariffs as “dumb” and said Canadian companies would be given government support that would even extend to protections against takeover interest caused by the trade war.
Mexico threatened both reciprocal tariffs along with non-tariff measures.
China also vowed to retaliate and reiterated its stance that the Trump administration was trying to “shift the blame” and “bully” Beijing over fentanyl flows.
Stock markets were down sharply across the world on Tuesday, with the Dow Jones Industrial Average and the broader S&P 500 on course for big falls for a second day.
The Nasdaq later entered positive territory.
Share prices for carmakers were among the worst performers generally.
Companies including General Motors, VW and Mercedes saw sharp falls as each has factories in Mexico which sell into the US.
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European stock markets had achieved record levels on Monday on the back of higher defence spending pledges.
But the German DAX closed more than 3.5% off. Its leading faller was Continental, the car parts manufacturer best known for its tyres, which saw an 11% decline.
The CAC in Paris was down by almost 2% while the FTSE 100 closed 1.3% lower as fears of an expanded trade spat overcame global growth hopes.
The implications were playing out more widely.
Oil costs were down by 1.5%, with Brent crude trading at six-month low of $70 a barrel.
Cryptocurrencies were hit too amid the flight from risk. Bitcoin was trading at $83,170 – far below the $100k+ witnessed when Mr Trump took office.
There was also evidence that investors saw the tariffs as an own goal because the US dollar – usually a safe haven in times of market woes – came under pressure.
The pound was trading at its highest level versus the dollar since mid-December at just shy of $1.28.
The main threat to the US is that higher import costs, caused by tariffs, push up inflation as those costs are passed on.
Consumers in the US could see price hikes within days, one expert said.
Gustavo Flores-Macias, a public policy professor at Cornell University, New York, said “the automobile sector, in particular, is likely to see considerable negative consequences”.
This is due to supply chains that “crisscross the three countries in the manufacturing process” and ” because of the expected increase in the price of vehicles, which can dampen demand,” he added.
Volodymyr Zelenskyy has been called a “crook” and a “punk” by a former top aide to Donald Trump.
Steve Bannon also told Sky’s Ali Fortescuehe thinks the US president should pull out of a planned minerals deal with Ukraine.
In a wide-ranging interview on the Politics Hub, the ex-chief strategist said Mr Trump’s efforts to improve relations with Russia is a “brilliant” move.
Image: Steve Bannon speaks at a conservative conference in Maryland earlier this month. Pic: AP
Mr Bannon said the UK and Europe need to “wake up” and realise they do not have to be worried about Russia invading the rest of Europe, as they do not have the army to do it.
“The rapprochement of the United States with Russia breaks the control of the Chinese Community Party… it’s a brilliant stroke.”
He added the EU “will come along with it” and insisted Mr Trump is “going out of his way to be a peacemaker”.
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But he was clear about whether the leader should agree to sign a deal with Ukraine‘s president for rare minerals, which was supposed to happen on Friday until the pair had a heated row in the Oval Office.
“Absolutely not. He [Zelenskyy] had his shot. Zelenskyy is untrustworthy. He’s a crook and a punk. And he showed what a punk he was in the Oval Office the other day,” said Mr Bannon.
He suggested the row was prompted by Mr Zelenskyy trying to get security guarantees from the US, something the American public would not accept.
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“They told him, time and time and time again, do not bring up security guarantees. A security guarantee means… American troops and that will never happen,” said Mr Bannon.
He also said the deal was unnecessary and only a “very general framework” anyway, which risked tying the US to the “future reconstruction of the country”.
“We don’t need a rare earth deal. The United States doesn’t need rare earths from Ukraine. That was a total gift to him and the Ukrainian people.”
However, sources have told the Reuters news agency that Mr Trump is planning to announce the US and Ukraine’s minerals agreement during his address to Congress on Tuesday.
Mr Trump has paused military aid to Kyiv in the most dramatic step yet in his pivot towards closer ties with Russia.
‘Let EU underwrite Ukraine security’
Mr Bannon also took aim at European nations, saying defence spending was insufficient: “Let them [the EU] step up and let them underwrite the security of Ukraine.”
In particular he described the UK’s commitment to spend 2.5% of GDP on defence as “nothing”. He also criticised Britain’s combat capabilities saying the economy “can’t afford it”, adding the “bond market already turfed out Liz Truss“.
He said the “reality” is that much of NATO did not spend enough on defence, has “faked” for decades its capability to take on Russia, and the military alliance would struggle to put up “two combat divisions”.
Mr Bannon also accused “much of the British establishment” of being in business with the Chinese Communist Party.
In terms of UK politics, he says he is “a Nigel Farage guy and believes in Reform“.
Mr Farage is close to the US president but has had to be slightly more reserved in his praise of him of late – knowing British public opinion is very much behind Mr Zelenskyy and Ukraine.
Volodymyr Zelenskyy has said Ukraine is “ready to come to the negotiating table as soon as possible” in the search for a “lasting” peace with Russia.
The Ukrainian president made the statement on social media hours after Donald Trump’s White House announced it was pausing US military aid to Kyiv.
He also said he was “ready to sign” a deal giving the US access to minerals in Ukraine – which has been a sticking point between the countries in the last week, with Kyiv seeking security guarantees in return.
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0:59
The president ‘is focused on peace’.
The Ukrainian president stopped short of saying sorry in the statement, but outlined how the first stages of a possible peace deal might work.
He also reiterated how grateful he was for American support for Ukraine, after Mr Vance criticised him, claiming he had not shown enough gratitude during his explosive White House visit.
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Mr Zelenskyy added: “Our meeting in Washington, at the White House on Friday, did not go the way it was supposed to be.
“It is regrettable that it happened this way. It is time to make things right.
“We would like future cooperation and communication to be constructive.”
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Mr Trump‘s berating of Mr Zelenskyy was condemned by many and has led to a show of support from European leaders as they try to formulate their own way forward.
The US president attacked the Ukrainian leader again on Monday, telling reporters he should be “more appreciative”.
Image: The tens of billion in US aid has included Patriot air defence systems. Pic: Reuters
Image: Volodymyr Zelenskyy. File pic: Reuters
Writing on Truth Social, Mr Trump also said Mr Zelenskyyhad made “the worst statement that could have been made” after he commented that peace was still “very, very far away”.
“America will not put up with it for much longer!” he posted.
“It is what I was saying, this guy doesn’t want there to be peace as long as he has America’s backing,” the president added.
Mr Zelenskyy then posted on X that Ukraine was “working together with America and our European partners and very much hope on US support on the path to peace”.
“Peace is needed as soon as possible,” he said.
‘Music to the ears of Putin’
By David Blevins, US correspondent
President Trump’s decision to pause military aid to Ukraine marks a significant shift in US foreign policy, one previously considered unthinkable.
This blow to Ukraine’s defences in the face of Russian aggression will be music to the ears of President Putin. US military aid has kept Ukraine in this David and Goliath battle for three years.
It has funded what military analysts simplify as “the big stuff” of battle – artillery, anti-tank weapons, rockets and armoured vehicles. Trump’s decision to push pause disregards efforts by Keir Starmer and other European leaders to devise a peace plan.
Those already questioning Europe’s reliance on the US for defence will conclude they have been given the answer.
But the decision sets President Trump up for a potential confrontation with Republicans, who had approved the funding, in Congress.
White House sources say he wants President Zelenskyy to go on TV and apologise for the jaw-dropping showdown last Friday. But the Ukrainian president feels he has no apology to make for expressing his doubt about Russia’s commitment to peace.
Earlier, Trump side-stepped a question about a Kremlin diplomat claiming the US administration and Moscow were now aligned on foreign policy.
This weakening of Ukraine’s defence capability moves that question front and centre as he prepares to address Congress on Tuesday.
Despite the diplomatic crisis, Mr Trump has said a deal is still possible.
An agreement giving the US access to Ukraine’s rare earth metals was meant to have been signed by the two presidents on Friday.
It was billed as an important step in a future peace deal – and part payback for aid already received.
However, the dramatic falling out has thrown that into jeopardy.
Mr Zelenskyy wants the metals deal to include guarantees on halting Russia should it break the terms of any peace agreement.
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Mr Vance suggested on Monday that the metals pact was the best way to secure a lasting end to the war.
“If you want real security guarantees, if you want to actually ensure that Vladimir Putin does not invade Ukraine again, the very best security guarantee is to give Americans economic upside in the future of Ukraine,” Mr Vance told Fox News.
“That is a way better security guarantee than 20,000 troops from some random country that hasn’t fought a war in 30 or 40 years,” he added.
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3:27
Sky News gets rare access to drone launch
Mr Vance said Mr Zelenskyy had shown a “lack of respect” and “a certain sense of entitlement” in Friday’s trip to Washington.
He repeated that the door was still open if he altered his approach, but told Fox News he “still isn’t there”.
UK Prime Minister Sir Keir Starmersaid Britain was prepared to put “boots on the ground and planes in the air” under the plan – but it’s unclear who else might participate.
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The overall US total is €114bn (£94bn) and the European one €132bn (£109bn). This includes humanitarian aid and other financial assistance to keep the country running.
Following the weekend summit, the UK also pledged £1.6bn in finance for Ukraine to buy another 5,000 air defence missiles.