UK leader in peril after Treasury chief axes ‘Trussonomics’

The U.K.'s new Treasury chief ripped up the government's economic plan on Monday, dramatically reversing most of the tax cuts and spending plans that new Prime Minister Liz Truss announced less than a month ago. The move raises more questions about how long the beleaguered British leader can stay in office, though Truss insisted she has no plans to quit.

Chancellor of the Exchequer Jeremy Hunt, said he was scrapping "almost all" of Truss' tax cuts, along with her flagship energy policy and her promise, repeated just last week, that there will be no public spending cuts.

While the reversal of policy calmed financial markets and helped restore the government's economic credibility, it further undermined the prime minister's rapidly crumbling authority and fueled calls for her to step down before her despairing Conservative Party forces her out.

Truss declined to attend the House of Commons to answer a question on the economy from the leader of the opposition, sending House of Commons leader Penny Mordaunt in her place. Mordaunt denied a lawmaker's suggestion that Truss was "cowering under her desk" to avoid scrutiny.

"The prime minister is not under a desk," Mordaunt said, words hardly likely to inspire confidence in the leader who only came to power last month.

Truss' spokesman said the prime minister and Hunt had jointly agreed on the economic changes. But Hunt told Conservative lawmakers that Truss "backed him to the hilt in making difficult decisions", suggesting he has a free hand to make policy.

With Truss sitting silently beside him, Hunt told lawmakers that he was canceling Truss' plan to reduce the basic rate of income tax by 1 percentage point and most of her other libertarian economic policies. In a message aimed...