Kwarteng admits new energy strategy could take half a decade to reduce bills

Kwarsi Kwarteng sacked following morning meeting with Truss

Having flown back to the United Kingdom early this morning for crisis talks with the prime minster, the Chancellor Kwarsi Kwarteng has been sacked by the prime minister.

Mr Kwarteng last night cancelled meetings that were scheduled for today at the IMF in New York to board a late night flight back to London.  In his traditional letter on leaving office, Mr Kwarteng confirmed that Liz Truss had effectively asked him to stand down as Chancellor.

As part of the changes, Mr Kwarteng’s deputy, the Chief Secretary to the Treasury, Chris Philp MP, has also been removed, and transferred to a role in the Cabinet Office.

Liz Truss is now planning to hold a press conference on the economy in which it is widely thought that she will signal that parts of the Chancellor’s recent mini budget will be reversed.

This has already promoted the Labour MP, Dawn Butler to joke on Twitter, ‘Is Liz Truss now part of the ‘anti-growth coalition’?

Mr Kwateng leaves the Treasury after just 38 days as Chancellor.  He becomes the second shortest serving Chancelllor in UK history, after Iain Macleod who died following a heart attack just 30 days into the Ted Heath government of 1970.

Mr Kwarteng’s tenure was 25 days shorter than that of his predecessor, Nadhim Zahawi. who lasted 63 days.

Last night the former Conservative Chancellor, Kenneth Clarke, warned Liz Truss about dismissing the Chancellor.  Speaking on the BBC Newsnight programme, Lord Clarke said, “I wouldn’t sack Kwasi Kwarteng, because it’s not even clear it’s his budget actually”.

Continuing, Lord Clarke said of the prime minister, “Sacking Kwasi would solve nothing. The political reaction would be ‘oh he’s just been made a scapegoat’. She’d be in terrible trouble if she sacked him. She’d be in trouble if he just resigned. What they need to do is a proper U-turn”.

As yet, Liz Truss has yet to name a replacement for Mr Kwarteng. It remains to be seen whether this morning’s move will be sufficient to sure up support for the prime minister herself amongst an increasingly fractious parliamentary conservative party.

Previously the prime minister and Mr Kwarteng enjoyed a good relationship, with the pair even living on the same street in south east London.

The Chancellor’s removal comes ahead of the Bank of England holding its final bond auction between 2.15 and 3.45m this afternoon.

With the pension market remaining under continuing strain, the statement by the governor of the Bank of England, Andrew Bailey, that the Bank will not buy bonds after 3.45pm this afternoon, has led some to suggest that Mr Bailey has embarked on a game of ‘chicken’ with the government.

To this extent, the governors’ intervention is now being directly linked to the departure of the chancellor.

To reiterate the point, the former permanent secretary to the treasury, Lord Macpherson this afternoon tweeted, “All credit to Bailey of the Bank whose Friday deadline has forced the government to adopt a more orthodox economic policy and thus restore order to the markets”.

The value of the pound dropped 1% in the immediate aftermath of the news about Mr Kwarteng’s departure.