UK Prime Minister Liz Truss has appointed former Cabinet minister Jeremy Hunt as new Treasury chief, replacing sacked Kwasi Kwarteng.

Hunt is a government veteran who has served as former foreign secretary and health secretary, and ran unsuccessfully to lead the Conservative Party in 2019.

Truss also replaced the second highest-ranking Treasury minister in a bid to restore order after weeks of turmoil over the government’s economic plans.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

LONDON (AP) — Embattled British Prime Minister Liz Truss fired her Treasury chief ahead of a hastily arranged news conference on Friday as she struggled to calm markets and hang on to her job following the release of a controversial economic plan.

Kwasi Kwarteng’s departure comes after just over a month in the job — and three weeks after he announced a tax-cutting “mini budget” that sent the pound plunging to record lows against the dollar.

Kwarteng tweeted his departure letter to Truss, saying “You have asked me to stand aside as your Chancellor. I have accepted.”

He defended the government’s economic plan, saying the country faces an “incredibly difficult” situation and “following the status quo was not an option.”

Market reaction was muted, having already baked in the notion that the government will back down on some of its key proposals.

Truss is due to hold a news conference later Friday. She is under intense pressure to scrap some of the 43 billion pounds ($48 billion) in unfunded tax cuts that roiled financial markets and led the Bank of England to step in to prevent a wider economic crisis.

Senior members of the Conservative Party were publicly advising the government to take action. The pound rose as much as 1.7% against the dollar on Thursday and bond markets stabilized amid expectations that Truss would revise the economic growth plan.

Truss, a free-market libertarian, came to power last month pledging to cut taxes to spur growth. But her ability to deliver on that commitment is now in doubt.

Analysts suggest the most likely change in her program would be to abandon a promise to halt her predecessor’s plan to increase corporation tax from 19% to 25%. That would reduce the bill for her program by about 18 billion pounds a year.

James Athey, the investment director at abrdn, said that it now seemed certain that the government “is about to U-turn on its decision not to U-turn on its profligate tax-cutting policies.″ The rumors are calming markets, he said.

“The risk now is that investors have forgotten that there are significantly more problems than just an ill-advised and ill-timed fiscal easing to deal with,″ he said. “Inflation is at multi-decade highs, government borrowing is huge as is the current account deficit. The housing market is likely to suffer a hammer blow from the jump in mortgage rates and the war in Ukraine rumbles on. We may well be through the worst of the volatility but I fear that the U.K. is nowhere near out of the woods.”

Conservative lawmakers are agonizing over whether to try to oust their second leader this year. Truss was elected last month to replace Boris Johnson, who was forced out in July. Some reports suggest senior Conservatives are plotting to replace Truss with a joint ticket of Rishi Sunak and Penny Mordaunt, her two closest rivals in the summer contest for leadership of the party, though it’s unclear how that could be achieved.

(AP)