Liz Truss sends legal letter ordering Starmer to stop saying she crashed economy
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‘Cease and desist’ letter accuses PM of harming her reputation and contributing to her losing her seat. Liz Truss has sent a legal letter to Keir Starmer demanding he stops making “false and defamatory” claims that she crashed the economy. The former prime minister sent a six-page “cease and desist” letter accusing Starmer of harming her reputation and contributing to her losing her South West Norfolk seat in the general election.
The row came as the UK’s long-term borrowing costs hit their highest level since the 2008 banking crisis, and the value of the pound reached its lowest point in a year. Truss’s legal letter argued that the market meltdown that followed her disastrous mini-budget in October 2022 could not accurately be described as “a crash of the economy” because it did not involve a fall in GDP or rise in unemployment.
Citing a report by the economist and rightwing commentator Andrew Lilico for Europe Economics, the letter said the economic turmoil was the result of factors over which Truss had “no control”. It claimed that the dramatic rises in interest rates and long-term government borrowing costs during her short-lived premiership were the result of failures by the Bank of England, and that describing them as an economic crash suggested an “ignorance of basic economics”.
Pension funds managing vast sums came close to collapse as a result of the meltdown in government bond markets after Truss’s mini-budget. Defined-benefit pension funds, which guarantee a set income in retirement no matter how investments perform, were caught out because they had relied heavily on LDI (liability-driven investing) hedging arrangements, which involve holding government bonds as collateral.
