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By Hamish Armstrong (Senior Communications Officer), Published

Commenting on the departure of Kwasi Kwarteng, Professor Vasso Ioannidou, Professor of Finance at Bayes Business School (formerly Cass) said the former Chancellor of the Exchequer had left a ‘devastating’ legacy on the economy.

“The decision to relieve the Chancellor of his duties is the only thing that will allow Liz Truss to save some face, ahead of widely anticipated u-turns that are about to come,” she said.

“The Chancellor’s mini-budget and devastating impact this had on markets will define his tenure.

"The unavoidable dismissal was entirely predictable under most mainstream economics and political science models developed since the 1980s. This episode is as much the responsibility of Liz Truss as it was Kwasi Kwarteng’s, if not more.

“Mr Kwarteng’s departure increases uncertainty, which generally leads to market turbulence, but the more moderate Jeremy Hunt’s appointment into the role should calm things down. It also signals a backtrack on the former Chancellor’s fiscal budget from September, which created storms in the first place.

“Early movements suggest the City has reacted positively to this news.”

Professor Ioannidou added that she expects a milder approach from the new Chancellor.

“I suspect the Government will now take a more fiscally conservative approach – as Rishi Sunak insisted he would have done as leader – having seen its credibility take a major hit with historic slumps in the pound and opinion polls.

“This is very good news for mortgages and inflation expectations.

“The past few weeks cannot be simply erased, but in my eyes this was an incredible test and confirmation of the importance of central bank independence.”

All quotes can be attributed to Professor Vasso Ioannidou, Professor of Finance in the Centre for Banking Research at Bayes Business School (formerly Cass).