Financial Markets Tell Truss She’s Not Trusted

Following this worst possible start to her premiership, Truss needs to understand what went wrong and take prompt corrective action. Note that the problem isn’t confined to the content of Friday’s “mini-budget,” bad as that was. As a minister and during her campaign to succeed Boris Johnson as prime minister, Truss had already built a reputation for recklessness. The new fiscal policy seemed to affirm it. She must put this right in short order, or things will go from bad to worse.

The new fiscal plan includes tax cuts worth some 45 billion pounds over the next five years — Britain’s biggest such package since the 1970s. It trims the basic rate of income tax by a percentage point and the rate applied to high incomes from 45% to 40%. It cuts the tax on property sales and provides generous new incentives for investment. These cuts will be introduced alongside a huge expansion of public spending on energy subsidies, intended to soften the blow of high inflation. Together these changes are likely to increase public…