Truss said she has “acted decisively” because her priority was to ensure the country’s economic stability.
“I want to be honest. This is difficult. But we will get through this storm and we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.”
Government bonds — at the centre of the turbulence that followed Kwarteng’s fiscal statement last month — have already staged a recovery from the lows of the week as markets increasingly anticipate a U-turn on the tax cuts. Gilts extended a rally from Thursday into Friday, with the yield on the 30-year bond down 0.24 percentage points to 4.31 per cent as its price rose sharply.
The pound slipped 0.4 per cent to $1.124 against the US dollar, trimming a rally overnight that had sent it as high as $1.137.
Kwarteng had earlier confirmed that he has been sacked by posting a letter he had sent to Truss on Twitter.
In it, he said: “You have asked me to stand aside as your Chancellor. I have accepted.”
“When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.”
But Kwarteng, a close and long-time political ally of Truss, pledged to remain loyal to her government and urged her to take bold political action.
“We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first chancellor.“
Truss has already dropped their pledge to scrap the 45 per cent tax rate for high-income earners, after a large-scale rebellion from backbench MPs who threatened to vote against the legislation.
Hunt will be Britain’s fourth chancellor in four months, with Kwarteng serving just eight more than those managed by the Conservative Iain Macleod, who died in office after just 30 days in 1970.
Nadhim Zahawi, who took over from Rishi Sunak in July after his resignation in protest of Johnson’s handling of the several scandals which led to his downfall as prime minister, served for 63 days.
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