Liz Truss refuses to apologise for sparking mortgage rate rise – but admits one failing as PM
Liz Truss has acknowledged she and her government lost the confidence of financial markets following the mini-budget of October 2022 – but has refused to apologise to homeowners for higher interest rates.
Talking to Sky News, the former prime minister blamed her downfall on the Bank of England, primarily governor Andrew Bailey. However, she said she did not meet Mr Bailey once during her time in office.
“I actually had a meeting set up – I wanted to meet him,” she said. “But I was advised that would be a bad idea. And perhaps I shouldn’t have taken that advice.
“But that advice came from the cabinet secretary and what I didn’t want to do is further exacerbate the [market] problems.
“In retrospect, yes, I probably should have spoken directly to the governor of the Bank of England at the time.”
Follow live – latest politics news
Asked about the aftermath of the mini-budget, at which her chancellor Kwasi Kwarteng announced a series of unfunded tax cuts, without presenting evidence of how he would pay for them, Ms Truss said: “It’s fair to say that the government did not have the confidence of the markets…
“But if you have organisations within the state, like the Bank of England, like the Office of Budget Responsibility, who are pretty clear to people they don’t support the policies that are being pursued and are essentially undermining those policies, then it is difficult to command the confidence in the markets – because the markets look to the government for that leadership.”
Please use Chrome browser for a more accessible video player
A look back: Truss’s time as PM
During Ms Truss’s short time in office, the expected path for the Bank’s interest rate a year ahead rose from below 4% to around 6%.
While those rates were increasing before the fiscal event, they shot up dramatically in the wake of the mini-budget, rising even further when, a few days later, Mr Kwarteng promised even more tax cuts.
That sharp increase in interest rates precipitated a short-lived crisis in UK financial markets, which triggered the near collapse of liability-driven investment (LDI) funds which underlie the pension market.
Asked whether she would apologise for the sharp rise in interest rates during her time in office, Ms Truss said: “I question the premise of what you’re asking me, because mortgage rates have gone up across the world.
“The issues that I faced in office, were issues of not being able to deliver the agenda because of a deep resistance within the establishment.”
More from Sky News:
Resignations and rebellions in less than 50 days as PM
Truss memoir breaks Cabinet Office rules
Liz Truss beside Kwasi Kwarteng at the mini-budget announcement in September 2022. Pic: UK Parliament/Jessica Taylor/Handout via Reuters
She continued: “I think it’s wrong to suggest that I’m responsible for British people paying higher mortgages. That is something that has happened in every country in the free world.
“I’m not saying that I got everything absolutely perfect in the way the policy was communicated. But what I am saying is I faced real resistance and actions by the Bank of England that undermine my policy and created the problems in the market.”
Ms Truss was talking to Sky News in Washington DC on the US leg of her publicity tour for her new book, Ten Years To Save the West.
Click to subscribe to the Sky News Daily wherever you get your podcasts
Since publication it has emerged that one of the quotes she used in the book, attributed to Mayer Amschel Rothschild, is in fact a fake quote, often used in an antisemitic context.
Ms Truss said: “I’m very sorry about that. It was a complete mistake. It was something I found online and I’ve said I’m very sorry to the British Board of Deputies for that.
“It will be removed from all future editions of the book and removed from the Online Edition.”
Asked whether she feels more at home in the US than in the UK these days, she said: “Well, I do like aspects of American politics. I believe that on economics the US has got it more right than the UK has.
“My heart’s in Britain. But I think you’ve got to be prepared to learn from other countries that have that success.”
You can watch the full interview with the former prime minister on Sky News’s Sunday Morning with Trevor Phillips programme from 8.30am this morning. Trevor is also joined by Energy Security and Net Zero Secretary Claire Coutinho, shadow justice secretary Shabana Mahmood and Reform UK leader Richard Tice.
UK drivers are “confused” by the country’s electric car transition, ministers are being warned.
Although most drivers are not hostile towards electric vehicles (EVs), many are confused about what changes are coming and when, according to new research from the AA.
In a survey of more than 14,000 AA members, 7% thought the government was banning the sale of used petrol and diesel cars.
Around a third thought manual EVs exist, despite them all being automatic.
More than one in five said they would never buy an EV.
The government’s plan for increasing the number of electric vehicles being driven in the UK focuses heavily on increasing the supply of the vehicles.
Please use Chrome browser for a more accessible video player
What you can do to reach net zero
In 2024, at least 22% of new cars and 10% of new vans sold by each manufacturer in the UK had to be zero-emission, which generally means pure electric.
Each year, those percentages will rise, reaching 80% of new cars and 70% of new vans in 2030.
Manufacturers will face fines of £15,000 per vehicle if electric vehicle sales fall short of 28% of total production this year.
Read more from Sky News:
Survivor reflects on five years on from COVID
At least 12 people injured in shooting in Toronto
By 2035, all new cars and vans will be required to be fully zero emission, according to the Department for Transport.
Second-hand diesel and petrol cars will still be allowed to be sold after this date, and their fuel will still be available.
There are more EVs – but will people buy them?
In February, 25% of new cars were powered purely by battery and in January, they made up 21% of all new cars registered in the UK.
But despite the growth of electric sales, manufacturers continue to warn that the market will not support the growth required to hit government EV targets, and called for consumer incentives and the extension of tax breaks.
The AA suggested the government’s plan focuses on “supply but does little to encourage demand for EVs”.
It called on ministers to co-ordinate a public awareness campaign alongside the motoring industry which directly targets drivers who doubt the viability of EVs.
“Our message to government is more needs to be done to make EVs accessible for everyone,” said Jakob Pfaudler, AA chief executive.
Which? head of consumer rights Sue Davis said: “When it comes to making sustainable choices such as switching to an electric car, our research shows that people are often held back by high costs, complex choices or uncertainty.
“The government needs to provide the right information on electric vehicles and other sustainable choices so that people have the confidence to switch.”
A Department for Transport spokesperson said: “We’re investing over £2.3bn to help industry and consumers make a supported switch to EVs.
“This includes installing a public charge point every 28 minutes, keeping EV incentives in the company car tax regime to 2030, and extending 100% first-year allowances for zero-emission cars for another year.
“Second-hand EVs are also becoming cheaper than ever, with one in three available under £20,000 and 21 brand new models available for less than £30,000.
“We’re seeing growing consumer confidence as a result.”
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports11 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway