Contrition can be disarming. But Kwasi Kwarteng’s U-turn on the abolition of a 45p tax rate for high earners will not restore the UK’s fiscal credibility. The measure accounted for under 5 per cent of the £45bn package of unfunded tax cuts in the “mini” Budget 10 days ago.
Moreover, the reverse ferret has proved a damaging thesis about the UK chancellor and Prime Minister Liz Truss. It is this: they lack the judgment to intuit the mood of markets or their own party.
Their original unforced error led to an extreme jump in gilt yields. The disarray is ominous. Markets are febrile. Modest bad news can trigger massive sell-offs, as US tech stocks have also shown.
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