Description
More than two years on from Liz Truss’s ill-fated premiership, the legacy of the mini-Budget continues to shape the British political economy. While existing analyses often focus on the role of Truss’s personal blunders, the mechanics of the LDI crisis in the pension sector, or conspiracies of deep state collusion, this paper adopts a different approach. It seeks to use the mini-Budget event as a case study to examine the internal dynamics of the British state apparatus in response to an emergent financial crisis. Drawing on literature on structural power and state theory, it frames the mini-Budget as a form of intra-elite conflict between Truss’s libertarian economic project and the autonomy of the macroeconomic policymaking institutions of the British state. It contends that the Truss administration’s rebuke of these institutions and its break with expectations of fiscal discipline amidst the Bank of England’s transition toward monetary tightening provoked an institutional backlash that exacerbated market instability and reinforced a conservative macroeconomic consensus. Reconstructing the events of September-October 2022, this paper shows how key actors within Treasury, the Bank of England, and the OBR leveraged their unique position within the British state to protect their institutional autonomy, realigning around an agenda of fiscal conservatism and technocratic control that continues to dominate the macroeconomic regime of the UK.
