Analysis: Liz Truss is in big trouble after her biggest U-turn yet

'Everyone is scrambling for the lifeboats' Analyst Scott Lucas doesn't expect PM Liz Truss will be able to survive, calling her mini-budget a 'political version of the Titanic.'

Liz Truss has sacrificed her finance minister and closest political ally just weeks into her premiership in order to save her own skin.

On Friday morning, Britain's Chancellor of the Exchequer, Kwasi Kwarteng, was summoned a day early back to London from the United States straight to Downing Street, where he was relieved of his duties.

The move came three weeks after Kwarteng announced a controversial mini-budget full of unfunded tax-cutting measures that sent financial markets into meltdown. At one point, the pound sank to its lowest level against the dollar in decades.

Markets have settled somewhat since, though only after major intervention from the Bank of England, leaked rumors that the mini-budget would be abandoned and reports that Kwarteng would be sacked.

Kwarteng being gone, however, does not mean that Truss is out of the woods. The low-tax, free-market policies that Kwarteng announced were the exact ticket on which Truss ran to be prime minister.

The pair had written about their shared view of a low-tax, high-growth Britain in a book authored by a group of Conservatives as far back as 2012. Kwarteng and Truss were in lockstep in their vision for Britain; removing him from office is a tacit acceptance that her economic plan has failed.

"The problem with their budget was never the numbers, it was much more about the credibility of the plan," a former Conservative cabinet minister told CNN shortly after Truss sacked Kwarteng.

"You can reverse numbers and scrap policy. You can't reverse credibility. She has removed her lightning rod, but now the lighting is going to hit her."

Truss ended a notably brief news conference at Downing Street on Friday afternoon in which she defended her economic vision, but declined to apologize to her party or the public over the turmoil unleashed by the mini-budget.

"We recognize because of current market issues we have to deliver the mission in a different way," Truss said. "And that's what we are absolutely committed to do."

Asked whether she would say sorry to her party's lawmakers, some of whom are publicly trashing her economic agenda, she replied: "I am determined to deliver on what I set out when I campaigned to be party leader. We need to have a high-growth economy but we have to recognize that we are facing very difficult issues as a country."

Truss swiftly replaced Kwarteng with Jeremy Hunt, a former cabinet minister of multiple briefs who has stood for the leadership twice. She described him as "one of the most experienced and widely respected government ministers and parliamentarians."

Views are mixed on whether the new Chancellor will be a stabilizing influence on either the party or Truss. Some Conservative MPs think that Hunt, who served as health secretary, foreign secretary and culture, media and sport secretary under previous governments, will bring unity to a party that is still recovering from the summer's bruising leadership contest.

He is respected by both the left and right of the party and has a calm, reassuring and familiar nature that appeals to a certain type of Conservative.

However, he is also easy for the opposition Labour Party to attack. Hunt-skeptics point out that his record in government is patchy. Whether the accusations are true or not, it would be possible for opposition leaders to say that as health secretary, he failed to adequately prepare Britain's health service for the coronavirus pandemic.

And as a candidate in the summer's leadership contest following Boris Johnson's tumultuous premiership, Hunt had actually committed to bigger corporate tax cuts than Truss.

When asked why they thought Truss selected Hunt, despite his obvious flaws, one influential Conservative MP told CNN that it was possible Downing Street looked at her leadership rivals from this summer's contest and realized Hunt was the candidate from the left of the party who secured the fewest vote from MPs. Less of a threat than promoting other contenders who gave Truss more of a run for her money.

Hunt will now address the nation on October 31, to deliver a fiscal policy to the country that will explain how the government plans to balance the books as it borrows money to help people pay energy bills over the next two years.

The reversal in tax cuts will, Truss said, provide £18 billion. And it's not beyond the realms of possibility that further savings will be made as Kwarteng's budget becomes a distant memory.

What Conservative MPs are most worried about is that Truss's credibility is blown and her authority gone. She has appointed a chancellor whom she cannot blame for any future hiccups, and now looks seriously weak in the face of a reenergized opposition Labour party, which is surging ahead in the opinion polls.

So what comes next? The next general election doesn't constitutionally need to take place until January 2025, though no one is suggesting Truss will survive anywhere near that long. Yet getting rid of the party's fourth leader in just over six years in the short-term would be difficult, even if things continue to go south.

Under party rules, Truss is protected from a leadership challenge for the first year of her premiership. It is possible that her MPs could rewrite the rules, but even if they manage to, there is no certainty that replacing her would turn the polls around.

One Conservative lawmaker even suggested that a good outcome would be removing Truss so a new leader could attempt to turn things around just enough to prevent the opposition from a landslide in the next election.

Some of her lawmakers fear that crowning another leader without consulting the public -- just months after replacing Boris Johnson in a similar fashion -- could make the party look even worse in the eyes of the public.

All of which means that for now, Truss and her party are stuck. And unable to make major reforms, without key allies and reaching across the party for the sake of unity, Truss's government runs the risk of looking like a caretaker government that is simply waiting for someone else to take over.