What Happened to Trussonomics?
Trussonomics refers to the short-lived economic agenda of former UK Prime Minister Liz Truss and Chancellor Kwasi Kwarteng in late 2022, characterized by unfunded tax cuts and deregulation aimed at stimulating economic growth. The policies triggered a severe market reaction, leading to a sharp fall in the pound, a crisis in the gilt market, and ultimately, Truss's resignation after just 49 days in office. Its legacy continues to be debated, serving as a cautionary tale against unfunded fiscal expansion.
Quick Answer
Trussonomics was the economic strategy of Liz Truss's brief UK government in September-October 2022, centered on significant unfunded tax cuts and an energy price cap, intended to boost economic growth. However, it led to immediate financial market turmoil, including a plummeting pound and soaring government borrowing costs, nearly triggering a pension fund crisis. The backlash forced the government to reverse most policies, led to the sacking of Chancellor Kwasi Kwarteng, and culminated in Liz Truss's resignation, making her the shortest-serving Prime Minister in UK history. As of 2026, 'Trussonomics' remains a byword for fiscal irresponsibility, influencing political discourse around spending pledges.
📊Key Facts
📅Complete Timeline16 events
Term 'Trussonomics' Gains Currency
The term 'Trussonomics' began to gain traction as Liz Truss outlined her supply-side economic vision during her leadership campaign, advocating for tax cuts and deregulation.
Liz Truss Becomes Prime Minister
Liz Truss officially took office as Prime Minister of the United Kingdom, succeeding Boris Johnson, and appointed Kwasi Kwarteng as Chancellor of the Exchequer.
Energy Price Guarantee Announced
Truss's government announced a plan to cap energy prices for households and businesses for two years, a significant intervention costing tens of billions of pounds.
The 'Mini-Budget' Unveiled
Chancellor Kwasi Kwarteng delivered 'The Growth Plan,' widely known as the 'mini-budget,' announcing £45 billion in unfunded tax cuts, including reversing corporation tax increases and abolishing the 45% income tax rate. No OBR forecast was published.
Pound Sterling Hits All-Time Low
Following the mini-budget, the pound sterling plummeted to an all-time low of $1.033 against the US dollar, and government bond yields surged, signaling severe market distress.
Bank of England Intervenes in Gilt Market
The Bank of England launched an emergency £65 billion program to buy long-dated government bonds to prevent a collapse of pension funds and restore market stability.
U-turn on 45% Income Tax Rate
Under intense political and market pressure, the government announced a reversal of its plan to abolish the 45% additional rate of income tax.
Kwasi Kwarteng Sacked, Jeremy Hunt Appointed
Liz Truss sacked Kwasi Kwarteng as Chancellor and appointed Jeremy Hunt, who immediately began to signal a significant shift away from the mini-budget's policies.
Most Mini-Budget Tax Cuts Reversed
Jeremy Hunt announced the reversal of almost all remaining unfunded tax cuts from the mini-budget, including the planned cancellation of the corporation tax increase.
Liz Truss Resigns as Prime Minister
Liz Truss announced her resignation after just 49 days in office, becoming the shortest-serving Prime Minister in UK history, citing her inability to deliver on her mandate.
Rishi Sunak Becomes Prime Minister
Rishi Sunak was appointed Prime Minister, inheriting the economic challenges left by the Trussonomics experiment and pledging to restore fiscal stability.
Kwasi Kwarteng Announces Departure from Politics
Kwasi Kwarteng announced he would not seek re-election as an MP at the next general election, reflecting on his controversial tenure as Chancellor.
Liz Truss Publishes Memoir
Liz Truss released her memoir, 'Ten Years to Save the West,' in which she defended her economic policies and attributed her downfall to the 'establishment' and 'global left.'
Kwarteng Reflects on Trussonomics
In an interview, Kwasi Kwarteng stated he would 'do it all again,' maintaining that the core idea of his economic plan was sound but its execution was flawed.
Trussonomics Still Influences UK Elections
The 'spectre of Trussonomics' continues to be a reference point in UK local and regional elections, with parties' spending promises being scrutinized in its shadow.
Jeremy Hunt Publishes Economic Book
Former Chancellor Jeremy Hunt released his book, 'Can We Be Rich Again?', offering a diagnosis of the British economy's challenges and potential solutions, implicitly drawing lessons from the Trussonomics period.
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🔍Deep Dive Analysis
Trussonomics emerged as the economic philosophy of Liz Truss during her campaign for the Conservative Party leadership in the summer of 2022, advocating for a 'dash for growth' through supply-side reforms, significant tax cuts, and deregulation. Upon becoming Prime Minister on September 6, 2022, Truss, alongside her Chancellor Kwasi Kwarteng, swiftly moved to implement this agenda.
The core of Trussonomics was unveiled in the 'mini-budget' on September 23, 2022. This fiscal statement included approximately £45 billion in unfunded tax cuts, such as reversing a planned corporation tax increase, abolishing the 45% additional rate of income tax, and reversing a National Insurance hike. Critically, these measures were announced without an accompanying independent forecast from the Office for Budget Responsibility (OBR), raising serious concerns about fiscal credibility.
The market reaction was immediate and severe. On September 26, 2022, the pound sterling plummeted to an all-time low against the US dollar ($1.033), and UK government bond (gilt) yields surged by over 1.60% in less than three days, indicating a sharp increase in government borrowing costs. This market turmoil threatened the solvency of UK pension funds, many of which used liability-driven investment (LDI) strategies that faced massive collateral calls.
In response to the escalating crisis, the Bank of England was forced to intervene on September 28, 2022, announcing a temporary £65 billion program to buy long-dated gilts to restore market stability. Facing immense pressure, the government began a series of humiliating U-turns. On October 3, 2022, the abolition of the 45% income tax rate was reversed. On October 14, Kwasi Kwarteng was sacked as Chancellor, and Jeremy Hunt was appointed as his successor. Hunt then reversed nearly all remaining mini-budget tax cuts on October 17, including the planned corporation tax freeze. Despite these efforts, confidence in Truss's leadership evaporated, leading to her resignation on October 20, 2022, after just 49 days, making her the shortest-serving Prime Minister in British history.
The consequences of Trussonomics were profound. It severely damaged the Conservative Party's reputation for fiscal prudence and contributed to ongoing economic uncertainty. While Rishi Sunak's government, with Jeremy Hunt as Chancellor, worked to restore stability through more conventional fiscal policies, the episode left a lasting impact on public finances and investor sentiment.
As of August 10, 2026, Trussonomics continues to serve as a potent political and economic reference point. Liz Truss published a memoir in April 2024, defending her policies and blaming the 'establishment' for her downfall. Kwasi Kwarteng, who did not seek re-election as an MP in 2024, reflected in December 2025 that he would 'do it all again,' believing the underlying idea was sound but the execution flawed. The 'spectre of Trussonomics' is still invoked in UK political discourse, particularly in local and regional elections in April 2026, as parties make spending promises, highlighting the ongoing sensitivity around fiscal responsibility. Former Chancellor Jeremy Hunt has also published a book in June 2026, 'Can We Be Rich Again?', reflecting on the challenges and potential solutions for the British economy, implicitly addressing the lessons from the Trussonomics era.
What If...?
Explore alternate histories. What if Trussonomics made different choices?