The MP for Bromsgrove (pictured) resigned in the latest twist of prime minister Boris Johnson’s post-Brexit cabinet reshuffle.
Rishi Sunak, former chief secretary to the Treasury, has been appointed as the new chancellor.
He had been in the role as secretary since July 2019, after previously serving as the minister for local government since January 2018.
Javid was set to lay out his plan for the economy and the country’s finances in the Budget scheduled for March 11.
But in a day of high drama for Number 10, the MP reportedly quit over the prime minister’s insistence he fire his team of advisers to stay in the role.
He had been chancellor for less than a year, taking up the post in July 2019.
It comes after housing minister Esther McVey was also sacked, as part of changes to Johnson’s senior team.
Budget could be spending bonanza
Paul Dales, chief UK economist at Capital Economics, said Javid’s exit could mean government purse strings are loosened more than previously expected in next month’s Budget.
The former chancellor was apparently reluctant to significantly increase public borrowing by cutting taxes or increasing spending and investment.
Dales added: “The move seems designed to allow the government to push through even bigger increases in public investment and perhaps resuscitate tax cuts that previously looked dead in the water.
“Indeed, Sunak’s previous votes in Parliament suggest his views are perhaps more aligned with those of the prime minister and his chief special adviser Dominic Cummings than Javid’s.
“His voting history shows he’s an ardent Brexiteer, supports reductions in corporation tax, cuts to capital gains tax and he’s gone on the record as favouring infrastructure investment. So this is either going to be a meeting of minds or Sunak will be the prime minister’s yes man living in Number 11.”