As financial meltdowns go last week’s debacle in Britain was a whopper. Not since the financial crash of 2008 has the City of London been in such a tizz. Panicked currency traders zapped Sterling down to its lowest US Dollar rate since the prime ministership of Margaret Thatcher; it was a collapse rescued by a £65bn intervention by the Bank of England.

Some would argue that it was the new prime minister Liz Truss’s aping of Thatcher economics that caused the panic. In recent years Truss has channelled her inner Thatcher by posing in identikit photos and clothes to those of her heroine. More importantly Truss wanted to carry out supply side reforms – notably cutting taxes - that her eminent predecessor had carried out so successfully some 30 years earlier. Nothing wrong with that.

Truss’s partner in crime, as the left portray it, was her new British Chancellor of the Exchequer, Kwasi Kwarteng. Born to Ghanaian parents, Kwarteng is something of a super-brain. He won a King’s Scholarship to Eton, got a 1st Class degree in history and classics at Cambridge and twice won the Browne Medal – a prize given annually since 1774 for the best Greek ode in imitation of Sappho or the best Latin ode in imitation of Horace. He also captained the winning team for the BBC’s University Challenge, the UK’s longest running quiz show.

After a year’s scholarship at Harvard University, Kwarteng returned to Cambridge to do a PhD in economics. Having entered parliament in 2010 with Liz Truss, Kwarteng’s political career has not hitherto lived up to his super-brain reputation. Perhaps he was not helped by a reputation for laziness. However, his big win was the close friendship that he developed with Liz Truss, his neighbour in London. According to some online scuttlebutt their friendship was more than political.

So, with such a brilliant man in charge of the economy why the crisis? The reasons are a combination of poor communication, bad timing and a cloth-eared lack of political sensitivity. The reforms consisted of lowering the top rate of tax from 45 to 40 percent, a cut in basic income tax, a cut in national insurance taxes, and most importantly a £100 – 200bn energy support package to individuals and business.

The markets took fright because the spending plans were larger than had been expected. Secondly, they were not accompanied by the usual report from the Office of Government Responsibility (OBR) on how the government could afford its plans. Seemingly unfunded spending spooked the bond markets.

Neither was luck with Kwarteng. The Fed’s earlier 0.75-point rise in interest rates had caused a global surge in long bond rates. The dollar rose against all currencies including the Euro and the Yen. Last week, even the Bank of Japan had to make a £25bn intervention in the foreign exchange markets.

The result was howls of protest from the BBC, the left and many Conservative MPs, the majority of whom supported the more cautious economic approach of prime ministerial candidate, Rishi Sunak. Over the last week the message of reform was lost amidst the squeals of anguish over rising mortgage rates and tax cutting measures that favoured the wealthy during an inflationary ‘cost of living’ crisis’.

Overnight, as Truss and Kwarteng prepared to face their MPs at their annual Party Conference in Birmingham, they flinched and reversed the cut in the highest rate of tax. In terms of reputational damage, it is too late. In the polls the Conservative Party popularity fell off a cliff. It has lost 28 percentage points since Boris Johnson left office.

With two years till the next election recovery is still possible. But Liz Truss is no charmer; listening to her speak ranks with the sound of fingernails on a blackboard. With worse economic news still in the pipeline the Conservative Party’s chances of re-election look bleak.