Jeremy Hunt Defies Next Chancellor Odds As Truss Sacks Kwasi Kwarteng

Jeremy Hunt has defied political betting odds by being appointed chancellor after Liz Truss sensationally sacked Kwasi Kwarteng following the government’s disastrous mini budget this October.

Kwarteng had only been in the job a month after he supported Truss in her leadership contest over the summer. The chancellor, along with Truss, pioneered a £45bn tax cutting initiative that spooked the markets into devaluing the pound.

Truss and Kwarteng initially refused to budge over their policies, which appeared to reward the wealthiest in society and kick the can of repaying the debt accrued by the Covid-19 pandemic down the road.

The UK economy only remained stable after the Bank of England stepped in to buy government bonds, pumping £65bn into the coffers.

Fellow Tory MPs called on Truss and Kwarteng to reverse their spending pledges and tax cuts, but it appeared as though neither would budge. 

Yet that all changed when rumours abound that Kwarteng could U-turn on his pledges – and this, it appears, forced Truss into axing him.

UK betting sites quickly scrambled to rearrange their odds on who would be the next UK chancellor and former chancellor Sajid Javid was heavily favoured to get the role. 

Hunt Defies The Odds

Betfair were first to whip up their odds on the news of Kwarteng’s exit. They placed Javid as an odds-on favourite, moving him in from 6/1 to a new price of 5/6, but the market was flipped on its head in a matter of hours.

That’s because Hunt defied his odds of 6/1 to return to the frontbenches having previously served as foreign secretary under Theresa May plus health secretary and culture secretary under David Cameron. 

Appointing Hunt as her new chancellor is a big climbdown from Truss and perhaps the beginning of a more reasoned approach to the UK economy that the markets would welcome. 

Hunt has become the de-facto voice of reason in the Tory party ever since his role as chair of the Health select committee put him at odds with the government’s Covid-19 response. 

At 6/1, he was not considered an unrealistic choice by the bookmakers, but they underestimated his chances nonetheless. 

Could Truss Be Next?

Truss sacking Kwarteng is a sign that all is not well in the cabinet. Traditionally, the PM and chancellor are a team that has to work together to get anything done in Downing Street.

There are already calls for Truss to resign following another drop in the pound’s value. More and more Tory MPs are railing against their leader whom they voted in mere weeks ago.

The bookies reacted to Kwarteng’s sacking by also slashing Truss’ exit odds. She is now 5/4 to be gone this year – which suggests a 44.4% likelihood.

That is not good news for the Tories or the markets. More uncertainty and the threat of a snap general election would trigger further turmoil. And all the while the country inches closer to a winter energy crisis.

Who Did Hunt Beat To Chancellor Role? 

Sajid Javid

Having worked as chancellor from July 2019 to February 2020, Javid had the experience required to fulfil the role, even if he doesn’t quite see eye-to-eye with Truss on the direction of the economy. 

Having been overlooked following Truss’ coronation as Tory leader, the MP for Bromsgrove now appears destined for a life on the backbenches.

Nadhim Zahawi

Having endured one of the shortest ever terms as UK chancellor – he lasted two months this summer – Nadhim Zahawi could have been parachuted in to continue the job from where he left off. 

Zahawi backs Truss and has generally towed the party line. He would have been seen as a steady hand amid the turmoil currently being thrown at the UK economy and the bookies had him at 2/1 so clearly fancied him over Hunt. 

Simon Clarke

Levelling Up secretary Simon Clarke could yet end up being promoted to one of the top jobs in the country. He is a big backer of Truss’ economic approach that petrified the markets in September. 

Appointing Clarke, a strong ally for Truss, may not have calmed everyone down though and, hence, he missed out on the opportunity having been given a 4/1 chance on betting apps.

Rishi Sunak

If Hunt represents a climbdown for Truss, Rishi Sunak would mark a complete U-turn. The pair battled it out for the leadership over the summer and Truss won the hearts of Conservative members with her pledges to cut tax and boost spending – something Sunak warned would trigger an inflation spiral. 

Sunak has proved to be right and the former chancellor could have come in to “save the day”. But pride may well have got in the way of that decision.